When it comes to succession planning, entrepreneurs can easily make mistakes, lose focus, or take the wrong path. But with some common sense, business owners can avoid errors and take control of the process.
Let’s begin with the approach touted by the Service Corps of Retired Executives, a nonprofit association that delivers advice and guidance to business owners and has the backing of the U.S. Small Business Administration. SCORE advocates the following five steps to succession planning:
1. Choose your successor.
2. Develop a formal training plan for your successor.
3. Establish a timetable.
4. Prepare for retirement.
5. Install your successor.
That seems simple enough. But, heaven forbid, if something were to happen today to one of the organization’s key contributors, what would you do? Try this exercise: Pull out the business’s organizational chart and identify the essential employees who make the business hum. Start with yourself and head down the chain of command. For each position ask, "If this incumbent employee were suddenly unable or unavailable to perform duties and responsibilities, what would the replacement have to know and be capable of in order to get the job done?"
Consider asking every vital member of your shop’s team to list their five most important and most frequently performed tasks or skills. Meanwhile, ask that person’s supervisor to do the same. Typically, this exercise yields about six to eight critical elements for each person’s job.
Next, identify one or two people, other than the incumbent, who could either capably fill in or be cross-trained to assume the role in a reasonable time frame. If you come up empty, start looking elsewhere. It’s better to realize now what traits and abilities are needed from a new hire to fill the void should a key contributor leave. Repeat this step for every position deemed mission critical.