Succession planning is no longer just utilised within the larger corporate organisations – in fact, it is now more important within SME’s. This is due to resource being smaller and knowledge being held by fewer people.
The Aldermore report found that 61% of UK SME’s have not implemented a plan to ensure their businesses do not suffer when key staff members leave, despite a survey revealing over one thousand senior business decision-makers at UK SME’s main concerns is the effect of the departure of their senior executive.
What is Succession Planning?
Succession planning is a short and long term strategy used to identify and develop individuals to fill business-critical positions, such as senior managers. It involves training and development as well as succession planning programmes that include tailored work experience relevant to future senior roles. Through the process, development of employee knowledge, skills and abilities prepares them for advancement into higher challenging roles. The aim is to effectively develop individuals to ensure employees are prepared to fill a key role when pivotal talent exit organisations unexpectedly.
The link with your Business Strategy
It is important to link succession planning with your business strategy. Your business plan depends on the right skills in the right place, and the skills for the roles you will need to achieve long term business aims. By linking succession planning and your business strategy together, risk is decreased if an employee leaves the company.
The Process of Succession Planning
Step 1: What are your reasons and who can help with the succession plan?
Determine what is stimulating you to develop your succession plan, the influential factors you are concerned with or aware of, such as, unexpected departures due to illness, planned departures in the next few years of key people or new strategic directions or market trends that will require new skill sets for key positions.
Step 2: Link your succession to your organization’s overall strategic plan & identify successors.
The strategic plan of your business informs all stakeholders, customers and employees, the direction of travel for your firm. If your succession plan is not matched to your overall strategic plan, then it is likely to fail. Strategic and successions plans need to align along the way, such that you have identified key positions your plan must cover.
Develop candidates internally as well as establishing recruitment pools to find potential successors. In doing so, clearly outlining to the individuals the competencies, talents, skills, and knowledge required for each key position.
Step 3: Execute the plan.
The succession plan needs to be executable and, translated into an action plan. It must include measurable goals, specified timelines, and people accountable for taking various actions or applying required processes.
The execution of the plan needs to be continuously monitored, evaluated and adjusted accordingly to ensure its success.
It is key to have a succession plan with a structure and people identified. Having no clear succession plan in place might lead to suppliers and customers becoming nervous on the longevity of the firm.
Nurturing Internal Talent versus Outside Recruitment
Recruiting new individuals directly at senior levels brings with it new ideas and approaches to business. However, heavy reliance on either outsiders or insiders is becoming a problem, as others suggest it is difficult to find the right balance of both in the workplace.
It is argued that outsiders should not be recruited at senior level due to their need to become accustomed to the corporate culture before progressing further in the company. However, others argue that employing from outside can bring with it external points of view, this is particularly important if a business is failing and investors need satisfying.
Whilst many employers may aim to recruit highly talented individuals externally for senior positions, promotion is likely to occur within the internal talent pool. This would be appropriate for organisations with organisational-specific knowledge. It is believed, internally developed leaders tend to be more successful than those brought in externally. Succession plans allow internal individuals to be made aware of opportunities within organisations to enable them to progress their careers.
Development of Employees
You can use a variety of ways to develop the employees you need for your succession plan, these include, lateral moves, team leadership roles and both internal and external development opportunities. When putting the time, attention and development into employees, you are able to retain superior employees as they appreciate the investment you have put into them. When employees recognise a clear career path for continued growth and development, they become motivated and engaged.
To successfully and effectively carry out succession planning in your organisation, identification of the organisations long term goals must be established.
For further information about succession planning for small and medium-sized enterprises, please contact Paul Windmill, paul.windmill@myersclark.co.uk.