If you are planning to retire during the next decade, it is important to start thinking about your succession plan now.
ConstructioNext shares the following key factors that can help ensure an orderly succession.
- Set an overarching goal for the succession process. The goal typically is to achieve long-term success for the company and its people, which includes those leaving, those taking over and all employees. Your company’s succession plan must be supported by its strategic plan. For example, if your plan calls for growth, you will have to plan for new positions and determine when to add them.
- Create a plan that meets the outgoing leader’s needs. It is important to take the outgoing leader’s personal financial plans into account so he or she can retire as expected. Be sure your succession plan timelines are based on conservative assumptions—if you would like to retire in five years but discover you may need more time to save for retirement, consider extending that timeline. The timeline should be supported by conservative modeling for the company’s volume and profits.
- Make sure the plan supports the team. If the plan does not involve team members seeing meaningful returns during the first six months to a year following the leader’s exit, employees may become discouraged and leave. Meaningful returns can lead to higher salaries or bonuses, more jobs and better employee benefits.
- Develop the right leader and leadership team. Preparing a team for new leadership takes time. Start involving employees with high leadership potential early in the process so once they hold leadership positions, they understand how to run the business successfully.
