One of the questions we get asked the most is what we do about succession planning. With great businesses come great responsibilities and risks. In order to protect you, your family, your employees, and your business, a business succession plan is an important piece to help you prepare and transition.
Ben Davidson, Vice President of Human Resources and Training at Idaho Central Credit Union said that “CEOs across the world agree that a lack of succession planning can stop a company’s growth faster than almost anything.”
So what are the benefits of having a business succession plan?
The greatest benefit of a business succession plan would be that it helps reduce the stress of co-owner(s) and the owner’s family. A business succession plan also assures a great transition for company culture, and minimizes the negative impact on employees. It can also help avoid contention when it comes to the money that is involved in the transition.
Here are some helpful tips in creating a succession plan.
Designate An Interim CEO
An Interim CEO is a person appointed by a company’s board of directors to assume the role of the CEO during a time of transition or as the result of the sudden departure of a company’s previous CEO. It’s important to have an interim CEO to be able to hold down the fort during the transition time, and ease the stress of the board of directors, employees, and company as a whole.
Business Estate Planning
Business estate planning is great for most family-owned businesses, and anyone that is planning to sell their business. It can help the business transition to the next generation or sell to someone outside the family. This can take years to prepare. Contact an attorney today to start your business estate planning.
Build Great First-Level Leadership
Davidson said, “Most companies focus their succession planning efforts on executive level positions. I think this is a mistake. Good first level supervisors can make or break a company’s culture.” Building great first-level leadership helps strengthen the foundation of the company because first-level leadership are those that work closest with most employees. It’s important to have a good system to recruit and retain talented leaders, where the great culture of a company can go beyond just one great CEO.
Identify HiPOs (High Potential Employees)
Research shows that HiPOs can produce about 90% more work and will give about 20 percent more effort than non-HiPOs. HiPOs are high potential employees that have the qualities and abilities to take on leadership roles and challenges. By identifying HiPOs, it makes a good pool of candidates that are advance-ready to step into leadership roles. Having a good pool of candidates that are advance-ready also makes the absence time shorter between leadership, and creates a more effective approach.
Contact one of our Business Relationship Officers today to learn more about our business services and how we can help you achieve financial success!