What is a succession plan
A succession plan outlines the procedures and policies for identifying and cultivating current internal management and employees to replace departures, regardless if the person quits, is fired, or retires. Depending on the situation, changes may need to be made immediately, so succession planning means that mechanisms should be in place to fill the vacancy as seamlessly as possible.
Why succession planning?
Money. On one hand, if the change causes a business interruption because a crucial function is no longer running, a company may face potential revenue loss. On the other hand, if you put a new hire or an internal candidate who is not fully qualified, you will need train and get the person up to speed quickly – requiring resources you probably didn't plan for.
Richard Cayne: “It is a cliché, but a prosperous company is a well oil-machine with high-quality employees as its various parts. If an essential part is missing or breaks down, so does the machine.”
What to consider
Are the positions defined? From CEO to assistant, the roles and responsibilities for everyone in the company needs to be clear and detailed.. General functions like “implement strategy” needs to include specifics on how this should be done as well as metrics against which it can be evaluated.
Are you developing your people? Large organisations can afford training departments to develop skills and identify people who should be cultivated for higher positions. Smaller organisations may need a more direct approach and have their upper management take the time to mentor potential replacements.
Are you compensating properly? Investing in your business also means investing in your people. While pay checks are an important consideration, many people also consider benefits and other intangible qualities when deciding whether to stay or leave, taking the knowledge and training they learned from you with them.
Once you decide to start succession planning, you need to make sure that all aspects are implemented. Having policies and procedures are only worthwhile if you follow them in practice.
You must make sure to revisit the plan on a regular basis as well. “Businesses evolve, so succession plans must be adapted to match any changes,” says Richard Cayne.
To continue this conversation, contact Richard at Meyer International.
About Richard Cayne
Richard Cayne is originally from Montreal, Canada, and currently resides in Bangkok Thailand with his wife Akiko Cayne and their two young children. He runs the Meyer Group of Companies (www.meyerjapan.com). Previously, he resided in Tokyo, Japan, for over 15 years, advising high-net worth Japanese families.
Richard has over 19 years of experience creating innovative international tax and wealth management solutions.
He is also currently the CEO of Asia Wealth Group Holdings Limited (htttp://www.asiawealthgroup.com), an ISDX (ICAP Securities & Derivatives Exchange, a London-based stock exchange) listed Financial Holdings Company.