What are Best Practices in Succession Planning? Four Ideas

Situation: A company wants to create a succession plan for key roles. Historically they haven’t had succession plans, but they are actively looking at candidates, skill sets, and so forth. The CEO wants to be able to make a recommendation to the Board. What are best practices in succession planning?

Advice from the CEOs:

  • Start with job and role descriptions. Select internal candidates for the positions and offer trial opportunities to assess their capabilities.
    • Test potential successors with projects to see if they can rise to the level of the higher responsibility. It may take more than one try to assess this.
    • Along the way you may discover hidden talents possessed by some of your employees.
  • Start with your incumbents. One of their responsibilities should be to identify possible inside candidates as successors for their positions, and to create a profile of qualifications for outside candidates. This should also be part of their job descriptions.
  • Succession candidates must desire the responsibility of the higher position. Don’t assume that everyone will want this. Some will be very good in their current role. Trying to force them to advance in responsibility can be counterproductive.
  • Do not assume that an outsider with a good resume and industry connections can fill the role of an insider who knows the company and its products and services.

2 thoughts on “What are Best Practices in Succession Planning? Four Ideas

  1. Joseph Berljawsky

    There are so many questions to consider:
    o Future economic needs of the business
    o Best timing for the formal transfer of ownership
    o Future roles for key employees, including possible ownership
    o Contingency measures for emergencies such as a sudden death
    o Retirement planning for the people involved
    o Corporate entity structure
    o Division of labor/responsibilities
    o Who has final authority

    Joseph Berljawsky
    B.C.L./L.L.B., BSW, MSW

    (514) 799-5639
    jb@AINattorney.com
    ————————————————————————————————————————-
    3901 Jean Talon Street West Suite 100
    Mt. Royal, QC H3R 2G4
    AINattorney.com

  2. Sandy Post author

    Thanks, Joseph.
    These questions are, in my opinion, even more difficult for family businesses because of the dual consideration of family dynamics and business dynamics. In a family business these can be far more emotional than in a non-family business. In a family business, decisions aren’t “just business.”

Leave a Reply

Your email address will not be published. Required fields are marked *

Sign in with Twitter