Why Business Succession Planning is More Important Now Than Ever Before

If there is one thing that an emergency does is it shows us our weaknesses.  Amid this pandemic, many businesses have been shuttered by government orders, while others deemed “essential” are operating with skeleton crews.

One thing is for certain in all aspects: business is just not the same these days.

If you have furloughed or laid off employees, how did you decide who to let go?  Was it simply “last in first out” mentality?  Did you consider performance metrics, or, hopefully not, age?

It is my hope that you made to decision to retain the best, brightest, and highest potential employees.  You see, it is that pool of employees that will bring your business out of the challenges we are facing.  It is these employees who are your future and will determine the success of your organization in whatever shape your business will look like when the pandemic passes.

You are probably asking, “OK, Ed, why should I be worried about business succession now?  After all, there are a few more pressing things on my plate.”

I understand.  The challenge for businesses today is to stay relevant and to pivot quickly when needed.  Only the best employees we have will be willing and able to meet this challenge.  As we emerge from the crisis, people will remember how we treated them during this unprecedented time.  Did we care about them, or only about the problems of the organization?  Did we put the “niceties” on hold because of these outside influences?

This is a great time to take stock of the emerging leaders in your organizations and to prepare them for roles of greater responsibility.  I fully expect that our economy will come strongly back, and there is no reason to believe that when it does that the options will be open for talented folks to jump ship.

What are your biggest challenges?  How can developing and implementing a leadership development program impact your business succession plan?  I have written about the variety of reasons business succession plans fail before.

I believe that leadership development is not only the right thing to do for our people, but it is also the right thing to do for our business.  A business is a living breathing thing.  And as such, we must feed it for it to stay healthy.  That food is the leader in whom we trust to make solid decisions for us.  Eating a lot of junk food is not healthy for our bodies.  Failing to “feed” our business in terms of developing our leaders is not healthy for the organization.

When implementing a business succession plan, it is important to understand the ramifications.  Some people may when they find out they are not “in line for the throne.”  That is OK.  Others may show their true colors and become “big-headed” when they find out they are included.  Both scenarios give us insight into who these folks really are and their level of loyalty to our organization.

Neither of these outcomes should deter us from investing in our people for purposes of including them in our business succession plan. 

First and foremost, we must analyze the needs of our organization and define those needs in terms of specific results and outcomes.  Then we must analyze our talent pool to determine who has the skill set to help us meet these goals, and who, with a little help, could gain the skills to help us.

Business succession plans are built on non-technical skills.  It goes without saying that an employee who lacks the technical skills required for the job cannot hope to lead others.  So where will you get your next generation of leaders?

I was just speaking to the CEO of an 800-person organization on this very point.  She told me HR has great systems in place, but they lack a focus on people development.  As a second-generation owner of the business, she is scared that HR is letting the future of the organization slip away.  She desires to develop the next generation of leaders NOW before she even has the need so that they will be ready to step in when the company needs them.  Talk about vision!

This business owner gets it.  She wants to invest in her business now, knowing it will pay big dividends in the future. 

That is why we plan for business succession.  It is a nearly sure-fire way to secure our future AND it has the added benefits of showing our people we care about their development as well.

I want to end with this thought:  I often get push back from owners who are afraid to develop their people for fear that they will take the skills elsewhere.  That is a distinct possibility.  But then you must ask yourself, “Why do I think they would leave me?”  That answer could be very telling.

After all, Sir Richard Branson said it best, “Train people well enough so they can leave, treat them well enough, so they don’t want to.”