Most business leaders can identify with the feeling of panic that sets in when an employee unexpectedly quits, is out sick for an extended period of time, or misses work because of a family emergency. These situations can create risk for an organization when a proper succession plan is not in place. Preparing a succession plan today can ease the stress of dealing with these business disruptions when they arise.
What Is Succession Planning?
Simply put, succession planning is a people planning strategy to ensure operations run smoothly and without interruption when a key employee or leader has a temporary absence or permanently leaves the company. Succession planning does not have to be complicated; however, it should include various scenarios to circumvent the negative effects of both long and short term disruptions.
A strong succession plan should answer the following questions:
1. What are the critical tasks at the company and who is responsible for them?
Sales, client servicing, accounting, processing payroll, taking client calls and safety.
2. Who will take over these tasks in the event of a temporary or permanent absence?
Do we have the staff with the time and knowledge to do the work? Do they want to do that work? Can the work be outsourced?
3. Who needs to be involved with creating the plan and who needs to know the plan?
How Does Succession Planning Mitigate Risk?
Benjamin Franklin is credited with the saying, “If you fail to plan, you are planning to fail.” Many business leaders are too focused on running the business operations to consider the “what ifs”. They rationalize that they will figure it out on the fly. Other leaders may have a plan in their head but have not written it down or communicated it to the people who will need to execute it. Without a solid succession plan in place, leaders are forced to make decisions in moments of crisis, and most people do not do their best thinking in emergencies. A succession plan ensures that everyone understands their roles and responsibilities, is ready to implement the plan, and allows the leaders to keep their focus on the business.
How Can Your Bank Help?
As a true business partner, your banker should be a strong resource for attorneys, accountants and other professionals who have a broad range of experience dealing with personnel situations. They should also be able to connect you with the right professionals to help you create a succession plan that is right for your company.
In our next succession planning article, we will share with you how a plan can help you build a stronger and more flexible business banking relationship, along with real life lessons learned from being unprepared for challenging business disruptions.
Authored by David Faust, President and CEO of Platinum Bank. You may reach David at firstname.lastname@example.org / 651-332-5214. Platinum Bank operates two locations in the metro area. Contact us to discuss the daily and complex matters that impact your business. Visit us at www.platinumbankmn.com.