Succession planning is important whether you run a family business or not. With family businesses, the successor is often chosen from one of the offsprings or heirs to the business. With other types of businesses, a successor is often chosen from a line of top level executives. In both cases, the criteria for selecting the next-in-line is similar.
If you want to avoid the succession disaster unfolding with Sumner Redstone and Viacom, take these steps to plan a company successor early on.
Step 1: Determine the positions that need succession, or gaps in organisational structure
This can be the easiest or the hardest step. If a company is well structured with minimal gaps, all executive members should have a succession plan. However, if there is an organisational structural gap, this step can be more complicated, and require board agreement for additional positions in the management team.
Step 2: Determine the skills needed for these positions
Different positions require different skills, and at times, personal traits. Identify the skills and traits needed for successors to fill the required positions. Use this as a guideline for the next step.
Step 3: Identify the talent pool
In the case of family businesses, the talent pool often refers to the sons and daughters of the owner. This is not necessarily the only option. Sometimes, a top level executive is the best man for the job. The most important thing is to identify talents with the required skill set and traits. You can also use a 360 degrees feedback process to help you with your decision making. Also assess the potential of young talents that might not necessarily have acquired the required skills yet.
Step 4: Train identified talents
Before training the selected talents, come up with a training plan. Follow the plan strictly for each identified talents. This will ensure that all the identified talents go through the same training regime so that they can be assess with the same criteria at the end of the training
Step 5: Assess and determine the successor
It is time to assess your identified talents. Ensure that a fair assessment is in place. This will make your decision making process simpler. Once you have decided on one or two candidates, groom them to take over the job. You can filter these candidates further according to the skills they demonstrate on the job.
Succession planning can be a long drawn process. Top bosses often review their successor every couple of years, sometimes changing successors in the process. It is more important to avoid clinging on to power for the sake of power and be willing to move on when the time comes.