Are Your Succession and Exit Strategies in Place?
As strange as it might sound to someone starting a new business, the beginning is when you need to plan for the end. OK, you might be thinking: ‘What is this dim-wit talking about? I want to know what to do today, tomorrow, next week and next month to get my newbusiness off the ground. I’ll worry about the end part later – much later.’ There is no time like the present to get to work on your succession and exit planning — before you need them. Developing key management concepts in the midst of a leadership crisis is definitely not the way to go.
The reality is that everything you do, every step you take in starting and growing a business should be based on where you want to be at the end. Your exit strategy and the succession plan that will make for a smooth transition and your successful exit possible shouldn’t be put off until the last minute. How will the company continue running strong with you, the founder or primary leader, out of the picture? What value will the firm have if you are no longer in the picture?
As the business grows, taking on its planned organizational structure, employees will be added to take on added responsibilities that come with growth. Success will bring growth to your customer base and revenues, introduce new products and services that provide for new market segments, and perhaps even increase the number of company facilities.
With your leadership skills focused on day-to-day matters that come with a successfully expanding business, it is easy to foget that no one is invincible or irreplaceable. Personal situations can change in a flash as drastic accidents, family or health issues arise. Any of these can pull a leader away on very short notice.
Having a succession plan in place can make such transitions less of a shock to the fiber of your organization. It involves identifying an appropriate successor, bringing her on-board far enough in advance for training and development necessary to take over the firm’s administration. Usually, the more history a successor candidate has with the company, the easier the transition phase. There are several key steps to take in developing your succession plan:
- Your Company/Industry Situation: Review the status of your company and industry today. But, also consider changes that might occur in the future and effects they might have. Based on this research process, develop a plan that includes the following phases.
- Search for Candidates: Successors can come from several sources: internal employee pool, external pool of others within your industry, and external pool of others outside your industry.
- Select & Develop the Right Candidate: Invest in training the ‘heir apparent’ to strengthen weak or missing areas of expertise necessary for them to take over the leadership role.
- The Transition: Managing the transition between leaders will be different for each company based on its unique situation.
While many companies manage to forge onward during a short term absence of key leaders, the longer your absence, the less likely your firm will successfully stay on track without a formalized succession plan. If you have left this important part of your planning on the back burner far too long, it’s time — NOW– to pull it out and get to work.
Planning for the success of your business when you are no longer there is crucial. Get to it! Put your company in a position to successfully pass the baton when it becomes necessary.