What are the 7 rules to create a successful succession plan – according to an article by Jason Arnold and found on Inspire website? I have added an 8th one at the end.
Whether you are a family-owned business and handing on to another family member or, what seems to becoming a trend, finding someone else to take over as the family does not want to come into the business you have successfully built:
Rule 1: Take a proactive approach to your succession strategy
Something that often doesn’t happen as it never quite makes it to the top of the priority list. Even if you are still in your 30s or 40s, this is worth doing….just in case.
Rule 2: Simplicity is key
Where disputes most occur, especially in family-owned business, is where the owner tries to accommodate multiple people, which tends to lead to complications. Often what is intended to be fair to multiple siblings, can turn into a nightmare fight for control.
Rule 3: Offer continuous and constructive feedback
Have regular meetings and provide guidance to those who will be part of the transition process.
Rule 4: Focus on measurable outcomes
Where there is not a clear successor, having measurable outcomes for the ‘candidates’ will make the process of appointment simpler and easier to justify if challenged.
Rule 5: Be realistic with your strategy
Succession transition cannot be something achieved in a few weeks or even a few months. If you have been running your business for more than 10+ years you are likely to have much of how the business really works in your head/ Therefore your succession strategy should be at least 2 years, with a contingency plan in case it needs to be put in place in less time due to unforeseen circumstances.
Rule 6: Understand and implement your Company’s vision
Ensure your successor understands the vision and purpose that drove you when you started, or took over the business. Where many 2nd generation businesses fail is due to the loss of passion and vision.
Rule 7: Use your succession plan throughout the organisation
The succession plan is also the vision for the future and will show employees that you plan for their jobs to continue and in a specific direction. Adding security also adds loyalty and continuity, something the successor will need from key individuals.
BONUS Rule (8) Allow the successor to run the business according to their natural talents and personality
So many businesses do not survive the transition due to the original owner insisting the business continues to be led in their way. More often than not, the successor will be a very different personality and therefore leads in a different way, needs a different support team and will have a greater handle on what Entrepreneurship 2020 and beyond will consist of.
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