Why Business Succession Planning is More Important than Ever

Library | 1/20/2021
Women Entrepreneur


 
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The full magnitude of COVID-19’s impact on small businesses in the US has yet to be realized, but it’s already forced many businesses to close permanently or encouraged business owners to retire or sell. As federal funding runs out and with no new stimulus plan yet on the horizon, small business owners—including women-owned businesses—are faced with the difficult but important task of succession planning.

   

While traditional succession planning focuses on who will step up to lead if the owner/CEO or C-suite executives should leave, retire or pass away, emergency succession planning driven by the current crisis looks not only at top leadership roles in an organization, but also key operational roles.

   

And while succession planning was intended to create a blueprint for long-term change, it can also create a back-up for temporary circumstances—like if an essential employee has to take a leave of absence due to illness.

 
  

Here are five key things to consider when putting together a succession plan:

 
  

1.  Determine what roles are mission-critical to the success of your business.

During a public health crisis, any person in any role could be affected at any time. Figure out what roles are essential for your operations and management and make a plan for those crucial positions.

 

2.  Identify possible successors.

Review your in-house talent and identify people who you think would be able to quickly get up to speed when a specific role is vacated. Meet with your HR team as well as partners and top executives to come to consensus on who would be the most qualified successors for each role. (Note: if you don’t have in-house talent available to take over a vital role, consider recruiting and nurturing outside sources.)

 

3. Make sure your successors are on board.

You don’t want to put a plan in place only to find out that a person you intended to take over a certain role just isn’t interested or has different plans. Discuss the potential growth opportunity, ascertain if they are interested, and determine what steps they will need to take to prepare them to move into the new role if it should become necessary.

 

4. Provide support and training.

Figure out what skills, education and resources each successor will need to be able to effectively perform their new role. Ideally, this might involve shadowing and working with the incumbent before they leave, but this depends on the circumstances. Offer whatever support and guidance you can to ensure that the successor is confident, prepared and positioned for success.

 

5. Be transparent about your succession plan.

Succession planning isn’t a fun exercise – nobody wants to feel like they are replaceable, but the fact is, everyone has to be for the sake of the business. And the successors you prepare today can make a great impact on the future leadership and ongoing success of your business. Be sure everyone understands why succession planning is needed, what the plan is and how/when it will roll out so you’ll be prepared when the time comes.

    

At Valley, we’re here to support female entrepreneurs, as well as all professionals, and empower them to get through this difficult time and be ready for what’s next. Learn more about our Women in Business program, learn about available SBA loans, or visit our Business Insight Center for more helpful advice.

 

 
Valley Women in Business
Inspiring Women

Valley Women in Business

Valley's Women in Business program connects and empowers professional women. From entrepreneurs, to executives; we provide networking and educational opportunities that enrich the professional lives of women at every stage of their career.