5 Myths About Succession Planning

As a professional HR consultant, I find that bringing up succession planning is a bit like talking about wills—people get uncomfortable, change the subject and put it off rather than facing the facts.

However, if you want to have a sustainable business that succeeds after a key player or players are gone, you NEED to have a strong bench in the wings so that you can protect what you’ve built.

According to a study of 200 privately-held companies by Wilmington Trust, 58% of small business owners have no succession plan.

As a result, many of these SMBs are crushed and confused when talent leaves, gets sick or is promoted to another important position in the company.

Waiting until this happens is a sure-fire way to throw your business into crisis mode.

Here are 5 myths that we need to dispel:

1. “I’m not going anywhere anytime soon.”

   This is an especially common mantra in family-run companies. One of the main issues is that someone has often started out as a solopreneur, forging a path alone. They can’t envision not being around, so they stick their head in the sand.

   There’s always the old “you could get hit by a bus tomorrow.” Of course, that could happen, but there’s also a sudden illness, family emergency or—God-forbid—death. (On a lighter note, maybe the leader decides to retire and relax, or step away somewhat and take on more of an advisory role in the company.)

   It can be challenging to have the conversation, but it’s essential that you’re ready for the future, even if it might anger a family member or long-time employee. If you don’t, and the business closes, think of all your employees whose futures are now in limbo.

2. “They’re too good at what they do.”

   I’ve seen many situations where an organization keeps a star employee in their current role rather than promoting them because they’re so great at it.

   Is that what the employee wants and/or is best for their career? Is that what is best for the company? Great talent won’t wait around if they believe they don’t have a future at their current company.

   Be a mentor, not just a manager. Effective talent management involves recognizing potential in employees and continually discussing career goals, keeping in mind that not everyone will want to be a CEO.

   Before he stepped down as CEO of Apple, Steve Jobs prepared and recommended Tim Cook for his position. In a later interview, Cook said “I see my role as CEO to prepare as many people as I can to be CEO, and that’s what I’m doing.”

3. “I haven’t found anyone promising.”

   This often translates into “I haven’t found anyone like me.” Change can be hard, but a new leader doesn’t have to be the same as the existing one.

   In fact, a fresh perspective might revitalize and improve the business. Or perhaps you thought your children would carry on after you retire and now realize that they are pursuing their own dreams and aren’t interested in running your business.

   It’s important to be open to diverse candidates who may lead differently, but who embody the mission and vision of the organization. Give potential successors room to be different and support them as they explore and grow.

4. “It’s just one position to fill.”

   While this may be true for very small companies, it’s essential not to focus solely on the VP or CEO. Leadership is required at all levels of an organization, not just in the C-suite.

   For each of the key roles you need to identify someone who is ready now or could be ready in 12 – 18 months and then give them assignments that allow them to develop the skills needed for upward mobility.

   Recognize succession planning as a continuous, company-wide process. When it comes to talent management, involve leaders, supervisors and key stakeholders and always be transparent.

   It shouldn’t be something that is shrouded in secrecy or takes place behind closed doors.

5. “I’ll just sell if I have to.”

   Sure, selling can be a good option, but it’s not just a convenient plan B. Many times, people woefully overestimate the value of what they’ve created.

   While they have worked hard to build something that’s worth everything to them, that doesn’t mean that it’s going to be valued at millions of dollars.

   There’s also the matter of timing if you decide to sell. How’s the market? What will the tax impact be? Know what the value of selling is vs. handing off your baby to a skilled successor or successors.

Succession planning doesn’t have to be scary.

By creating a talent management process, investing in employees with potential and developing a transition plan you’ll be ready to face the future head-on!

The best way to ensure a smooth transition is to bring in a professional HR consultant. I have 25 years of experience with SMBs and corporations. Let’s start with a free consultation.