Why You Must Have a Clear Succession Plan for Your Company

Succession planning might not feel like a priority, especially during periods of growth. When the economy is strong or your business is doing well, you might be reluctant to think about what will happen to your business if you were suddenly unable to lead it. However, the adage applies here as well; if you fail to plan, you plan to fail.

Your plans for succession should be in place even when times are good. This is to be sure that the company will be in the hands of the right people, and its direction steered by capable individuals. We don’t know when a serious illness, disaster, pandemic, or accident might happen, so it’s better to be prepared for anything that can disrupt your workflows.

It is insurance for your business

Your company is probably insured against hurricanes, floods, fire, and all types of natural calamities. You might also have a back up of your company’s information, use advanced reporting capabilities software, and a security system to deter theft and other crimes. Treat your succession plan as a safeguard against a disaster, like how these other measures are.
A succession plan is there so your company doesn’t experience a leadership vacuum in the event that its senior members cannot perform their duties. The thought of needing insurance is scary, true, but you should be more scared of how the company would be like if you don’t prepare for this possibility.

It helps you spot potential leaders in your company

When you have a formal succession planning, you will have to identify the key positions for your company’s success and move your officers around as necessary. This means you have to find internal candidates who have the skills and attitude to take new roles in case the need arises.
When you formally plan for succession, you will have a better idea of the strengths and weaknesses of your organizational chart. It will alert you to vulnerabilities in your training program and might hasten the skill acquisition for people who must be tapped for roles.
Think of your succession documents as a client management relationship software; it helps you see, at a glance, your employees’ skills, how far along they are in being competent at these, and other matters that are important for their growth and productivity.
You can also identify gaps in your talent pool’s competencies, and give them tools to acquire more skills and certifications. Furthermore, planning lets ambitious candidates know that they are seen in the company and that their skills have been noted by management. Being considered for a management position can be a very good motivation to stay in a company.

It keeps people aware of the company’s identity

Sometimes you hear about CEOs who are hired from outside a company to replace executives who are on their way out. This transition usually comes with a lot of fanfare and with high hopes for the incoming executive. However, many of them fail to live up to the hype. It’s not that they aren’t good leaders. Often, this happens because the new CEO doesn’t understand the culture and values of the company they are leading.

Since they want to put their own ‘brand’ and establish themselves, new CEOs run the risk of pulling an organization away from its core identity. With proper planning, your company will be able to groom a successor who understands the company’s identity. Conclusion

Change waits for no one, but if your company knows where it is going, the fast pace of economic, social, and technological developments will not faze your employees. A clear succession plan is a way of signaling to workers that your company has definite goals and that its leaders are always working towards it.

Another way you can adapt to change is by incorporating new technologies into your workflow. At Firm360, we provide professional, cloud-based management software for accountants. Book a demo with us and see how you can simplify your practice today!

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