As I talk to small businesses or I teach a class that has an HR representative from a small or midsize company we stumble a bit when we get to the subject of succession plans. Many understand the concept but have never dealt with the subject at work. In fact, most of these businesses don’t have a replacement plan in place. The problem with these plans, especially succession plans, is that they are perceived as being a “big” company issue. They are also perceived as being an HR issue. Both of these could not be further from the truth.
Succession has to come from the top
The editors at Hunt Scanlon Media produced an excellent piece, about the importance of succession planning based on a report from Furst Group/NuBrick Partners CEO Bob Clarke and managing partner Joe Mazzenga. Titled How to Make Succession Planning Work in Practice, they said that in a survey of organizations “55 percent of organizations admitted their succession plans were informal, and six percent had none at all.” My guess is that since they were studying healthcare these were larger organizations. I am pretty sure those numbers would hold up across many industries. The authors of both the article and the study stress that in today’s business, political, and geopolitical climates organizations need to be prepared to deal with rapid change, uncertainty, and generational changes.
The study by the Furst Group says that leadership development is key to companies being successful today. They said:
“…leadership development provides continuity to an organization and accomplishes several key objectives. Among them, it acclimates and trains young leaders; offers opportunities that help retain executives; reinforces the organizational culture; provides a process that identifies, and rules out, potential successors; and ensures attention to diversity remains front and center.”
They also stated that this process is the responsibility of the CEO and the board. Notice that this is not the job of HR. Certainly, HR plays a vital role in this. HR will supply the data, help in the process of candidate identification, provide guidance in making sure this is done legally, especially since diversity is a primary goal of these programs.
The Furst Group says “The goal is to identify successors not only for CEO roles but for other C-suite positions and even titles further down the organizational chart.” Smaller organizations which are not planning on doing succession plans should go through this process for replacement plans as well. While not doing full-blown leadership development training, it is important to have managers, supervisors, and some key positions, such as HR or payroll, cross-trained in case a key person is taken away by some unfortunate illness or accident.
Being prepared with a succession plan, or a replacement plan, will help organizations of all size weather misfortune and keep the company working.