What Is Succession Planning—and How Do You Do It?

May 1, 2021

What Is Succession Planning—and How Do You Do It?

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It’s been said that great chess players can always see the right moves ahead. They know their endgame and are able to move toward it with precision. Running a small business isn’t so different, as you’ll need to consider similar elements if you hope for great performance in the future.

Succession planning is like playing competitive chess, acknowledging the fact that some of your key pieces will be taken off the board over the course of the game. If your rook and knight were to go, what strategies would you employ? What if you lose 5 pawns? And, shudder to think, what if your powerful queen leaves the game?

If you’ve prepared for these scenarios, you’ll be able to move forward with your game strategy. And you do this by identifying ways to continue functioning at a high level when your key contributors depart the company due to new opportunities, life demands, retirement, or tragedy. Note that we’re talking about “key contributors” and not “leaders”strong businesses get crucial contributions from individuals at all levels in the company. So you should be just as prepared for your all-star graphic designer to leave the company as you are for your head of sales to go.

The talent within your business is your lifeblood. You might replace that talent by recruiting someone from the outside or elevating someone already within your organization. What matters: you aren’t caught flat-footed when the need arises. The last thing you need during these difficult times is an arduous recruitment period that drags on for 18 months. Think of what you’d lose and the opportunities you’d miss out on.

These factors can be even more pronounced in family businesses, where legacies loom large and desired successors might also come from within the family.

“In Hollywood, many sequels were created in the 1910s as a cost-saving measure that allowed directors to reuse sets, costumes, and props,” explains the Harvard Business Review. “Sequels have become big business in Hollywood because they build pre-awareness—the audience’s sense of comfort and familiarity with the concept that often leads to big box office numbers today. Family business sequels have similar traits to cinematic sequels. But in family business, it’s not sets and costumes that are reused; it’s ownership structures, role descriptions, and decision-making processes. On paper, defaulting to a family business sequel makes perfect sense. After all, what worked for the senior generation should work for their children, right? Enacting sequels also often offers the path of least resistance: it doesn’t require the senior generation to change their own responsibilities in anticipation of succession (or after) or to change how their organizations make decisions. But that path can lead to significant challenges.”

As noted by these Harvard researchers, succession planning shouldn’t simply be considered a glorified copy machine. If you try to replicate what used to be, you’ll never find out just how amazing your business can be. For this reason, succession planning is all about looking beyond the status quo, evaluating the available options, and strategically choosing the most impactful ones.

About the Author

Grant Olsen

Grant Olsen

Grant Olsen is a writer specializing in small business loans, leadership skills, and growth strategies. He is a contributing writer for KSL 5 TV, where his articles have generated more than 6 million page views, and has been featured on FitSmallBusiness.com and ModernHealthcare.com. Grant is also the author of the book "Rhino Trouble." He has a B.A. in English from Brigham Young University.

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