Over the years, many of my searches have revolved around "succession planning". Generally, this meant helping privately held businesses define the requirements of a successor to lead the company to continued success and growth. After the role was defined, I was engaged to identify and help hire the ideal candidate for that role.
Succession planning is absolutely essential for the growth and stability of every company, not just large, publicly held firms with a huge number of employees, but also small to medium sized privately held firms. Succession planning is not only essential for the orderly transition of a retiring owner or CEO, but for every role in a firm that has direct reports.
Susann Heathfield defines succession planning like this:
"Succession planning is a process whereby an organization ensures that employees are recruited and developed to fill each key role within the company. Through your succession planning process, you recruit superior employees, develop their knowledge, skills, and abilities, and prepare them for advancement or promotion into ever more challenging roles.
Through your succession planning process, you also retain superior employees because they appreciate the time, attention, and development that you are investing in them. To effectively do succession planning in your organization, you must identify the organization’s long term goals. You must hire superior staff.
You need to identify and understand the developmental needs of your employees. You must ensure that all key employees understand their career paths and the roles they are being developed to fill. You need to focus resources on key employee retention. You need to be aware of employment trends in your area to know the roles you will have a difficult time filling externally."
I'm going to start with succession planning for principals or owners, then follow up with another blog regarding the other positions in every company. To make a broad generalization, privately held companies don't start succession planning early enough. Take a look at a previous post, "Succession Planning or Getting Out Alive?"
The ideal way to insure a smooth transition from the existing leadership (and ownership) to a new executive team, is to identify those employees who can be supported, trained and nurtured to take over the leadership of the business, when the time is right. Growth to leadership should be a consideration for hiring, and any level. That simply means hire people who are smart, ambitious and who are voracious "learners".
The obvious result of this sort of approach is stability . . . and as a result of that stability, employee retention and ongoing growth. Owners sometimes have trouble letting go, or don't think anyone else can lead or manage as well as they can. That likely means that they haven't been sufficiently sharing responsibility and supporting the growth of those employees who can help . . . and who want more responsibility (growth).
A succession plan that encourages an orderly, internal upward mobility stabilizes an organization and supports employee retention. Conversely, any company in which the principals and/or owners are approaching retirement age (and every employee knows it) and have not instituted and explained a plan for succession, have worried (or outright scared) employees. Worried employees is not a way to retain the best and smartest employees (future leaders). The lack of stability will lead to a lack of retention of key employees . . . all of which results in a lack of growth, if not outright company stagnation.