Our Top Five Advantages of Business Succession Planning

While it's no small feat for a start-up to mature into a 15- or 20-year-old company, no organization is completely safe during the unavoidable "changing of the guard." And while many companies have proper insurance and product development to protect the future, only a few secure the benefits of succession planning.

Succession planning is critical to long-lasting companies. Just look at Microsoft, Dell, and Apple– all were thriving, runaway success stories that drove their industries. 

But only as long as their founders were at the helm. All three companies brought their founders back out of retirement within just a few years to save the company from sudden and significant decline.

Nothing significantly changed about the talent working for the company or their product or services. But without solid continuity in leadership and vision, even the best companies quickly lose their footing.

So what are the advantages of succession planning? We're glad you asked.

1. Establishes Training Opportunities for Current and Future Leadership

One of the key components of high-functioning succession plans is consistent, goal-oriented training. Great companies prioritize culture fits when hiring, preferring to hire for attitude than experience when given a choice.

But when you hire for culture, you must follow up with robust training. Your goal is to reinforce a shared identity within the company. You depend upon employees staying and growing with your organization so they can one day continue to carry the same vision.

Proper training helps employees to reach their potential and increases their feeling that they matter to the company. It increases their buy-in to company success and increases employee retention and job satisfaction.

And it dramatically reduces the risk of having qualified talent when management changes hands.

2. Maintains Structure for Internal Growth and Position Expectations

We've witnessed an interesting phenomenon during the COVID pandemic. Many call it the Great Resignation or the Great Reshuffle. For many, the pandemic opened their eyes to new opportunities and refreshed priorities. But beyond that, it highlighted that many companies will not give nearly the same promotions or raises to internal positions.

For example, many working in the technology sector change companies every 2-3 years to get the best and fastest career advancement. Unfortunately, this is a costly habit for companies to sustain. 

It is at least 20% cheaper to maintain employees than hire new ones. And a much steeper cost when it comes to succession strategy. With a clear succession plan and culture of promoting from within, you'll increase employee loyalty, reduce costs, and secure a more stable future.

3. Provides a "What If" for Every Scenario

Few businesses operate without sufficient insurance coverage because it's simply not worth the risk. And most companies have clear marketing strategies, financial forecasts, and product development. But many companies forget to cover personnel "what ifs."

Proper succession planning maintains a perpetual loop of identifying, training and advancing the best candidates. As one position changes hands, you're already several steps into their replacement.

And when you have a fully operational and perpetual succession plan, you'll be ready for sudden personnel turnover at any time.

4. Creates Brand Consistency and Identity

One major hurdle for even the most successful companies is when the founder hands off the vision to the next CEO. Consumers don't change their interests or values simply because there's a new CEO. 

So if the next CEO tries to update or pivot the brand significantly, they're likely to alienate the consumer base and lose their footing in the market. That's precisely what happened to Dell, by the way.

Each new CEO (or any other management position, for that matter) must match the original vision and culture. They need to be an extension of the original brand, not to stay in the founder's shadow but to maintain momentum and market share.

5. Ensures the Longevity of Your Business

The bottom line? Without careful, strategic succession planning, your business legacy is up to fate. But with a few crucial systems in place, you can easily navigate toward a long and profitable future.

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Working with a Trusted Business Succession Advisor

With so many critical positions to fill, years between significant position moves, and maintaining a clear vision the whole time, managing proper succession strategy is a full-time job alone! 

So partner with trusted business succession experts. We'll help you create a clear plan, maintain it, and create a solid future for your company.

Contact us for a consultation today!

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