Top 5 strategies for a fail-proof succession plan

Top 5 strategies for a fail-proof succession plan

Did you know that around 70% of businesses fail to survive beyond the first generation of owners? However, the most common causes of business succession failures, such as trust and communication are not beyond your control.

Not all family businesses will have a next-generation family member who’ll take over from the owner/founder, so they have to start an outside search for the right person. This can be challenging and time-consuming and can make or break a company.

John Wilson, founder and CEO of the Global Network based in Toronto.

“Filling the top position, and that of other senior leaders in any organization is probably the most critical decision of any business. People in top management can leave a business at any time for several reasons, like retirement or for health reasons, or to seek another opportunity – leaving the business open to risk; unless there’s someone to step in and take charge without missing a beat,” says Wilson. “But succession, whether from inside or outside the company, is often not adequately covered and planned for.”

That’s why it’s critical for businesses to invest time in creating a fail-proof succession plan, both for emergencies and long-term, Wilson explains.

A strong succession plan directly impacts the financial success and sustainability of a business, as well as increases its value if you plan to sell.

Wilson, who has guided many CEOs through the process of succession planning for over a decade, offers the following advice.

Top 5 strategies for a fail-proof succession plan

  1. Most businesses tend to nurture and promote from within since employees are already in sync with the company’s core values and culture. A good succession plan ensures that the outgoing executive plan gives enough time to properly teach, mentor, and train the successor.
  2. Even if you plan to find a successor within your business, it’s good to test the market by making use of an executive search firm that specializes in headhunting for the right person within a larger talent pool. These firms do the heavy lifting on screening/interviews, which is a time-consuming task.
  3. If you’re not promoting from within, tap into your network and reach out to people you’ve had experience with.
  4. Identify the top 10 traits and values of the ideal candidate. Emotional intelligence (EQ) is five times more important than IQ and technical skills in leaders. Put your shortlisted candidates through rigorous self-assessment and interviews with other key stakeholders in your business.
  5. Where do you want your business to be in five years from now? Figuring out your vision will help the business owner find someone who not only lives your core values but shares the passion and determination to help it succeed in the long term.

These are a few of the strategies which can help you with a fail-proof succession plan for your business. Other than these you can always pick insurance for your business to protect it from any future losses. The business insurance will help you to manage your business in the odd times from business property, liability (including contractor’s insurance) to business vehicles.

A-Kan brokers work with more than 50 insurance providers in Edmonton, Alberta. We understand your business at every stage; whether it is a seed, a seedling, a young plant, or a tree, we’re always there to help you.

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