Why Succession Planning Should be a Top Priority for Founders and CEOs
Succession Planning is one of the most important, yet overlooked, executive functions within growing businesses today. The generally understood role of succession planning is to identify and prepare future C-level leaders for positions that will one day be transitioned due to a resignation, retirement, illness, or other unforeseen circumstances.
In this light, succession planning sounds like a long-term process; an HR strategy to be developed and shelved until disaster strikes. It is this flawed approach that could make a business vulnerable. Succession planning is an ongoing management process that impacts the business, its clients and employees on a daily basis. Done poorly, or not at all, it will affect the organization’s short-term success and long-term longevity. Done well, it will help to safeguard the business while positioning it for future growth by:
1. Mitigating the Perception of Risk Among Prospects and Clients
Succession planning isn’t solely an internal matter; it also impacts prospects and clients. During any software sales cycle, there will inevitably be questions probing the profile and experience of the executive leadership. Due to the mission-critical aspect of software businesses serving vertical markets, as well as the longevity of its product lifecycle, the strength and stability of a vendor’s management team will often be weighed as heavily as the breadth and depth of its product and support.
2. Securing the Best Talent and Future Leaders
Strategic succession plans need to go beyond the role of the CEO and other C-level functions. Considering the intellectual property of the employees, it is a best practice to identify all key players and develop career roadmaps to promote employee development and ensure a committed workforce. By developing talent from the ground up, as well as identifying gaps that may need to be filled externally, founders are ensuring that their vision will advance and grow as the company does.
Establishing Succession Planning as an Ongoing Business Priority
So if succession planning is such a critical element of corporate strategy, why is it done so poorly and infrequently? At an executive level, perhaps business leaders are too focused on pressing day-to-day issues to prioritize planning for unknown events occurring at an unspecified time. At a corporate level, businesses may not have the internal expertise or resources to develop and maintain a plan, especially when the organization has so many competing demands. Regardless of the justification, CEOs need to assess their talent bench strength or risk the long-term success of their business.
How does your organization plan for succession?