When many business owners think about succession planning, they think first about creating an exit strategy before retirement or the sale of their business. Owners and executives consider who should take over the business at that time – for instance, will it be a family member, an employee, a member of senior management or an outside buyer? – and how the transition will take place.
Succession planning often begins by taking a look at an organization’s finances to determine business value, assets, debts, current employee salaries, etc. While assessing finances is important, much of the planning should actually focus on people, their skills and their abilities.
In fact, the best business owners and executives realize that for long-term growth, a company should have a solid succession plan in place for every role in the company– and planning should begin long before a sale or retirement.
Ask yourself: If a key employee suddenly resigned or retired unexpectedly, would you know what to look for in a replacement? Do you have a list of the skills, traits, and abilities necessary for that role?
When and how to implement succession planning
Succession planning should begin much earlier than it usually does and should be a much bigger part of overall strategy for growth and success throughout the life of a company, not just at a time of sale or new leadership.
Your organization will be stronger if you can identify and take advantage of the skills your employees have now while also looking for skills you may be missing when hiring new talent.
You can also combine your succession planning with mentoring programs to ensure that employees – and especially those being targeted for future leadership roles – get the guidance they need and that people with valuable, but hidden skills don’t slip through your fingers.
Putting together an action plan
To begin your succession plan, you need to:
- Understand the skills and abilities of everyone in your current workforce
- Spot top performers throughout your organization
- Identify employees with the potential to grow so you can develop that talent
- Explore ways you can use under-utilized skills and strengths
Understand your current workforce
Using employment testing is a great way to test your current workforce. Testing not only helps you recognize the skills and traits that are critical for each role, but they help you build baselines – an outline of the necessary traits for your “perfect candidate” for each role.
Having a better understanding of your workforce will also show you where people need more training or mentoring. In fact, it’s a good idea to test employees throughout their careers at your organization so you and your managers understand if employees are growing and whether or not your training/mentoring programs are effective.
Finally, you’ll see where you’re missing important skills or character traits as you plan for new hires.
Spot top performers
You probably already have a sense of who some of your top performers are, but with personality and skills testing, you may find some people who have the right traits to become leaders – or to become highly successful in a particular role – but are currently “under the radar.” With the right support, they’re more likely to stay with your company and help it succeed.
Not everyone will become a manager at your organization. That’s as it should be. You can’t have a company full of CEOs! The goal is to find people who are very good at what they do for every role and then support them in those roles to be the best they can be.
Identify potential talent & help nurture it
Once you’ve identified paths for employees in a range of roles, you’ll want to create on-boarding, mentoring, and training programs so that your employees develop the skills they need to stay and grow.
By identifying the key traits and skills for each position, you can put together career plans and mentoring programs that help ensure that people are being trained and groomed for the future. Having clear career plans in place to help employees set, monitor, and reach goals will assist you in many ways, including during ongoing performance reviews, and will help reduce turnover.
Explore ways to use “hidden” skills and strengths
Finally, by testing your current workforce, you’ll probably find some people who have “hidden” traits and skills that you’re not using to their full advantage. Don’t let those skills and traits go to waste! Look for ways you can use employees’ natural talents for both their benefit and yours.
By including testing as part of your company’s entire business strategy, you’ll not only improve your existing hiring and development processes, but help employees succeed and better prepare for the future of your company.