How To Start Thinking About Succession Planning
Without a crystal ball, it’s impossible to know with complete certainty where the national economy or even a local real estate market will be in five or 10 years. That’s why it’s important for business owners and executives to focus on what they can control — starting with who will take over the reins at their companies when the time comes.
Succession planning is about more than just choosing the next president or CEO. It's about establishing a strategy for transitioning and ultimately replacing management roles at all levels in times of sudden change. With that in mind, here are some tips for how to devise a comprehensive succession plan.
1. Play Out Scenarios/Build Simulations
While it may not be possible to tell the future, business owners can still brainstorm a set of potential outcomes and challenges the company could face. The University of Washington Human Resources program lays out that the first step to any succession plan should be for owners to sit down and think of any significant business challenges that could arise in the next one to five years, from a sudden boom in demand to the unexpected passing of an executive.
After that, owners can begin to think about the skill sets and institutional knowledge that would be required of leaders to help their organization overcome those challenges.
2. Know Your Company Front To Back
In a perfect world, a CEO would always know in advance when a hard-to-replace team member is going to leave the company. But that is rarely how it happens. To combat getting blindsided by the departure of an employee, hiring consultancy Robert Half recommends owners comb through their entire organization, identify the key roles and determine what the day-to-day impact is of each of these roles.
From there, owners will be in a good position to consider who within their organization they could move into a vacant spot. It will also help determine whether it’s time to start hiring some new people. For the owner of a brokerage, a good place to start could be identifying brokers who not only have the strongest sales records, but also outstanding organizational skills, solid client relationships and those who have exhibited the strongest relationship skills. Using data and metrics can reveal talents in the company that executives may not even have noticed before.
3. It’s Not Planning, It’s Development
While a succession plan is just that — a plan — owners can’t stop at just the planning stage, they need to actually take steps forward to implement it. Harvard Business Review states that plans don’t develop anyone, only development experiences do. This is why it’s not enough to just come up with an ideal strategy and wait to implement it when the time comes, owners need to prepare their employees now.
Laying out clear career progressions from the entry level to the highest echelons of the organization can make employees feel they have a purpose, driving them to achieve more in search of more responsibility.
4. Talk To Staff
Rather than waiting until an event forces their hand, owners should talk to team members whom they have identified as good candidates to step into higher management roles in the future.
Robert Half recommends telling employees they are being singled out for positions of increasing importance, while letting them know that there are no guarantees and the situation could change down the line. This way, employees will be prepared if the time comes, and they can spend the time leading up to it honing their skills and continuing to show initiative.
This feature was produced in collaboration between Studio B and United Bank. Bisnow news staff was not involved in the production of this content.
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