“Succession planning doesn’t have to be complicated”
We all know we need one, but why is it so hard to prepare a succession plan? One of the most common reasons is the difficulty in just getting the process started.
Good news. You may have already started without even knowing it. Try using an existing company organization chart with some modifications as a starting point.
- Existing Org Chart:
- Includes key executives and management positions
- Indicates their job title and responsibilities
- Clearly shows the hierarchy levels
- Modify the Chart to add the following:
- Add skills required for upper level positions (Advanced degrees, technical skills, sales skills)
- Add job competency factors for each individual (Well-qualified, promoted due to length of service, etc.)
- Add position longevity (Project expected retirement age, lifestyle-leaving to start a family)
- Add compensation to each job position
- Review the Chart for these thought-provoking questions:
- What is total executive compensation?
- What is family vs. non-family compensation?
- Especially useful when determining if the firm can absorb new family members entering the business in the future
- Career Paths
- Highlight where the key family members are currently positioned on the chart
- Are they in their desired roles?
- Or are they just there because no one else was doing their role?
- Plan desired job paths – maybe with a dotted line
- Add position conflicts-competition between family members for future roles and how they will be resolved
- Determine Motivation
- Who is in the business because it is the “employer of last resort”?
- Who is content to stay in middle management?
- Who is eager to advance?
- What about the next generation entering the business? Pencil them in.
- What about next generation entering with advanced degrees? Enter from the bottom or come in at the top?
- How should you deal with the situation-favor the family member over the non-family member?
- How many non-family members are more qualified than family members?
- Run different “what-if” scenarios
- Ignore family ties – to just see how it shakes out
- Crisis management-what happens if there is a sudden change and the process happens faster than expected
This is one small area of succession planning, but one of the most difficult to get everyone to agree with. Once the future job roles and expectations are worked out, the rest becomes much easier; well maybe less difficult.