Top Five Reasons Every Business Should Have a Succession Plan
A good succession plan can help your business be more successful.
What would you do if you lost one of the leaders of your company? If you don’t have a detailed answer, you’re not alone. In fact, one study showed that nearly 60% of small-business owners don’t have a succession plan for themselves,1 let alone for their top executives. If this is true for your company, you should consider planning for leadership succession as soon as possible. The benefits of it can be enormous. Here are five reasons why.
1. Succession Planning Can Help You Survive an Unforeseen Event
Unfortunately, there are a lot of ways you can suddenly lose one of your company’s top leaders. Death, illness, personal problems, abrupt resignation, and even arrest can leave you with an unexpected vacancy in one of your most important positions. While you can’t plan for disaster, you can plan on how to respond to such events. Without a succession plan, you will have to scramble to keep the business running smoothly. But with a succession plan, you will have a strategy in place for filling and backfilling even the most important leadership roles in your company. This can be the difference between whether or not you keep your company afloat during trying times.
2. Succession Planning Forces You to Think Long Term
Many of us spend our time focused on this week’s meeting or this quarter’s earnings. It’s not that anyone believes long-term planning isn’t important, it’s that it’s hard to make the time. Succession planning forces you to take the time to think about your company’s future. Who among your staff do you think can rise to fill a top leadership position? How will you bring them along? If you don’t have anyone who can be trained to take on various leadership roles, do you have a hiring problem or a leadership development problem? Do you need to make changes? These questions—and many others—will come up during succession planning. Developing answers won’t just help you with future successions, it will help you set a smart course for your company’s future.
3. Succession Planning Can Spur Intracompany Communication
Since succession planning is about laying the groundwork for the future, it’s typical for companies to involve the heads of every department and/or every member of the organization. Getting everyone together to talk about future plans is a great way to promote communication between departments and/or employees. Any intracompany communication—but particularly conversations about long-term plans—can improve the way everyone works together on a day-to-day basis. Human resource professionals in your office can be a great asset, especially if they are credentialed human resource professionals and are well versed in succession planning.
4. Succession Planning Can Save You Money
If you aren’t prepared for an unexpected vacancy, you risk incurring significant costs. Not only are you unlikely to be efficient in your search for a replacement, but you may end up paying a burdensome salary to the person you hire. Some experts believe improper succession planning is the largest factor influencing bloated executive pay.2 It costs money to lure qualified people away from their current jobs. In addition, a new hire could bring along their own people, who may also cost you more than you would like. Even if there are no “surprise” circumstances for a leadership vacancy, having a documented succession plan in place for several positions can often save you the costs associated with hiring outside people for key leadership roles. If you have a plan for promoting from within, you can avoid paying a premium to fill an important position.
5. Succession Planning Can Keep Your Staff Motivated
Putting a succession plan in place can send a positive message to your staff. They will know the company is planning for the future, and perhaps more importantly, they will see that the company is committed to developing staff members for future leadership positions. By demonstrating your dedication to stability and internal promotion, you can increase your staff’s confidence in the company and motivate them to give their best effort.
Where Can You Learn More About Succession Planning (and Good Personnel Management)?
Creating a good succession plan takes a lot of skill and knowledge. One of the best ways to acquire the expertise you need is to enroll in an online Doctor of Business Administration program with a specialization in Human Resource Management. Earning your DBA online lets you take advantage of online learning’s flexibility and convenience, meaning you can earn your doctorate while you continue to hold down your current job.
Earning an online DBA degree with a human resource management specialization will help you become an expert in personnel management. It’s a great way to learn the skills you need to help your company—or any other company—put a succession plan in place.
Walden University is an accredited institution offering an online DBA degree with a specialization in Human Resource Management. Expand your career options and earn your degree in a convenient, flexible format that fits your busy life.
Walden University is accredited by The Higher Learning Commission, www.hlcommission.org.