Most entrepreneurs go into business not just to make money, but to build something long-lasting and enduring. Singapore is the perfect place to do it as growth is strong and more than 14,000 new businesses opened in the final quarter of 2017 alone.
As an entrepreneur, you will eventually start to move away from the day-to-day running of your business and hand over leadership functions to others within the company. Whether you are a business owner yourself or an HR specialist, succession planning ensures a smooth transition, so the business can continue to run efficiently in a time of change.
What is succession planning?
In the inception of a business, it’s common for the owner to do a lot of everything — accounts, sales, marketing, admin, creative, digital. As a company grows, the owner needs to hand over some of those critical activities to managers. Making sure that happens in a sustainable and efficient way is the essence of succession planning.
The succession planning process is a key function for businesses, especially for those that are family-owned, but one that is often overlooked by companies. However, it is essential to put a succession planning framework in place for several reasons:
- Avoids an organisational crisis if someone leaves without any plan in place for replacing them.
- Shortens the recruitment process.
- Helps retain staff as they can progress their careers in your business.
- Minimises the risk of unqualified individuals moving into leadership roles because no one else is available.
How to create a succession planning framework
1. Define your company vision and growth
Before you begin succession planning it’s important to have a business strategy in place, so you know where your business is going, what you want to achieve and how you will do it.
Once you have this, you can set sales forecasts and allocate budget to management development and leadership programmes that train key people to take over certain roles.
2. Identify key positions and areas
What positions are essential to your business? Consider which positions, if left unfilled, would be detrimental to the smooth running of your business. Once you have identified the fundamental positions and areas of your business, you should draw up a list of the key capabilities required for each of those. What are the competencies and skills needed for each of them to achieve your business goals?
3. Look at your existing staff
Carry out leadership assessments on your current employees. What skills do they already possess and what areas of the business are already covered by existing staff who could develop and move into leadership positions? How do they match up to the capabilities you have already identified?
Once you have a good idea of the current staffing situation, you can look at any gaps that you can’t fill in-house and consider how you will recruit for these positions.
4. Evaluation of potential succession staff
Your staff may have an idea of where they want their careers to go and what departments they wish to work in, but does that match up to what you need and is it practical? You will need to assess your staff’s potential and consider whether they are the right people for those roles. Some may be great in their existing positions, but will they be able to carry the weight of more responsibility in a more senior role?
You should also let your staff know if they are being considered for the roles and give those don’t have the necessary skills just yet some constructive guidance on what they can do to further their career with you.
5. Develop a succession planning framework
Once you have assessed your workforce and identified potential candidates, you need to put those succession plans into place by creating training and development programmes to pass on corporate knowledge. You should define what types of development programmes need to be created and what skills they should cover.
This can form part of your employees’ learning and development with your company. You could also introduce incentives to encourage employees to stay as part of your succession plan — a succession plan can quickly be rendered ineffective if key staff leave prematurely.
6. Evaluate your programme
Once you have created a programme it’s important to assess it regularly to make sure it’s working effectively. Have you developed succession plans for all key areas and are those positions being filled quickly? Are your new employees or existing staff members who have stepped up to take a more senior position performing well?