Succession planning is essential for businesses of all sizes

by Evan Davies, Chief Executive - QLD, VIC, NZ | |   Personal Success

Leaders don't always get the chance to decide exactly when they leave the business. It may come as a result of many reasons. Succession planning is an essential part of doing business, no matter how certain the future appears. It's easy to put off planning when everything seems to be going so well. Hereunder, are some of the reasons cited by members.

You can't plan for disaster. No matter how expert the organisation is at revenue projections or economic predictions, no one can truly plan for disaster. Whether it's an unforeseen illness, a natural disaster, or a CEO's decision to suddenly retire, the reasons for succession planning before it is needed are endless. Business can't plan for disaster, but it can put into place a series of contingencies that will help the company stay afloat if, in fact, catastrophe occurs.

Succession planning can benefit the organisation now. Just as business practices have evolved over the years, succession planning has also grown and changed. It's no longer a plan that can only be accessed when leadership is going to change; a succession plan can be used before its ‘real’ intent is necessary. It can be used to build strong leadership, help a business survive the daily changes in the marketplace, and force executives to review and examine the company's current goals.

Succession planning provides colleagues a voice. In a family business, the process of succession planning will give family members an opportunity to express their needs and concerns. Giving them that voice will also help create a sense of responsibility throughout the organisation, which is critical for successful succession planning.

Succession planning can help sustain revenue and support costs. Talking about finances should be a priority. A succession plan can provide answers as to what will be needed for future income, as well as what kinds of expenses maybe incurred once key people step out of the main leadership role.

Succession planning can help with the big picture. Some companies mistakenly focus solely on replacing high-level executives. A good succession plan can go further, however, and force the examination of all levels of employees. The people who do the day-to-day work are the ones keeping the business going. Neglecting to add them to the succession planning mix could have dire consequences. In the development of the plan, incorporate all layers of management and their direct reports.

Succession planning keeps the mood buoyant. Change - a major component of a succession plan - is exciting and can bring a company unforeseen rewards. Still, change can be a source of tremendous stress, especially when people's livelihoods are at stake. As the succession plan is put together, consider its positive effects on the business. Planning for the future is exciting and, if done correctly, can inspire staff to stay involved and maintain company loyalty (Forbes). It's true that a plan is often put into place to avert catastrophe, but it's also a company's way of embracing the future - a business strategy that is essential for survival.

Members agreed that succession planning is important in businesses of all sizes.

 


The CEO Institute was founded in 1992. It is now Australia's leading membership organisation for CEOs and senior executives. It provides a forum for over 1,000 Chief Executive members to connect and share their learning with each other. In 2011, The CEO Institute became the world’s first global certification body for CEOs, and in 2013, partnered with UNESCO in support of the "Malala Fund for Girls' Right to Education". In 2014, they began offering their programs globally. The CEO Syndicate is an exclusive peer support network for CEOs. The first meeting of The CEO Syndicate program was held in Melbourne in June 1992. Offices were opened in Adelaide in 1996 and Sydney and Brisbane in 1997, with Perth launching in 2007. In 2015 the New Zealand office opened.  The Future CEO program is a certification course designed by the business leaders of today for the business leaders of tomorrow. The first Future CEO meeting was held in Melbourne in May 2012. In 2014, the "Future CEO Scholarship Fund for Women" was established, and continues to be offered today. Membership of The CEO Institute is by invitation only. To register your interest click enquire.

 

 

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