Succession planning is the process of determining who will control and make decisions for the business and who will share in the wealth created by the business. It is an ongoing, proactive process that ensures the organization will endure after current leaders have moved on, passed away or retired.
Organizations with a succession plan tend to recruit the right employees, train and develop them, and reward them with promotions and recognition. With proper succession planning, when changes take place at the top, capable professionals are ready to take the reins, which makes for a smooth transition between the owner and the successors.
One of the advantages of succession planning includes the opportunity to evaluate the business to determine leadership needs not only for today, but also for the future. A well-developed succession plan can help the company retain key employees who might otherwise leave. Succession planning ensures leadership continuity and financial continuity, providing direction that enhances the company’s stability and reputation.
Succession planning, when done well, is an important element in the long-term health and success of a business.