Almost 70% of businesses don't survive past the first generation of owners. Sometimes there isn't a next generation family member to take over, in which case, the right fit will have to be found outside of the family. This step can be time-consuming and make or break a company.
Senior management can leave a business at any time- from illness, retirement, or looking for a different opportunity. Having an unfilled, high level position can leave a business vulnerable to risk. That's why it's critical for businesses to invest time into creating a temporary and long-term succession plan.
Succession Plan Tips
- An exiting executive should schedule enough time to properly teach, mentor and train the successor.
- For an external successor hire, use an executive search firm that specializes in headhunting for the right person within a larger talent pool. They can perform the screening and interviews to save time.
- If not promoting internally, the owner should use their network to reach out to candidates they've had personal experience with.
- Determine the top traits and values of the ideal candidate. Shortlisted candidates should be put through rigorous self-assessments and interviews with other key stakeholders in the company.
- Envisioning the business in 5 years time can help an owner find a successor who represents the company's core values and shares the passion and drive to help the company see long-term success.