Five Tips for Creating a Business Succession Plan

There comes a time when every business leader must step down and move on to other endeavors. A business succession plan ensures that there is a legally binding strategy in place for choosing the next CEO or other leadership members, should something happen to current leadership. Creating a business succession plan is essential to guarantee the company’s future success and ensure that the new leadership is well trained.

To craft an effective succession plan, you’ll need to work with a knowledgeable business attorney who can advise you on the best methods for preparing future leaders. Below, we provide five secrets and strategies that can help you create a successful succession plan for your small or family-owned business.

#1: What Are the Primary Characteristics of Your Ideal Successor?

Choosing the right successor will depend on the age and industry of your company. Although certain industries and organizations might value scientific or financial knowledge differently, there are general leadership characteristics that are important to every type of business operation. Qualities such as integrity, vision, innovativeness, honesty, and dependability are just a few that most people want to see in the future leader of their company.

#2: What Criteria or Methodology Will Be Used During the Selection Process?

When the time comes to select new business leadership, your plan should include a strategy for reviewing and selecting candidates. It’s not something you want to do quickly under pressure. Every executive should always be on the lookout for rising talent—both within their own organization and externally.

Some leaders like to choose from internal talent because they have unique insights not only into the company’s current problems but also its culture and available resources. Other companies might utilize a “shadowing program,” where new leaders shadow their supervisors for an extended period of time, learning their jobs and interacting with employees who report to them.

#3: Have You Reviewed & Updated Your Business Succession Plan?

Once you create a business succession plan, you need to make sure you periodically review it to see if it is still up to date and covers your company’s current needs. Your business succession plan is a living document that evolves as your business grows and adapts to the marketplace. Your business succession plan should always have specific emergency measures that should be enacted if an owner of the company unexpectedly departs from the company or passes away.

#4: How Will You Communicate Leadership Changes to Your Employees

If you want to prevent your employees, suppliers, and constituents from feeling like the future of the company is uncertain, then you need to quickly and effectively send the message out that a new leader has been chosen who is ready to take the reins. This is especially important if rumors are making their way around the company. Creating a communications plan in advance of announcing leadership changes can help facilitate a smooth transition.

#5: How Will the New Leader Become Familiar With the Company?

Once you choose the new leader for your company, there needs to be enough overlap time for them to become familiar with all of the products and processes. As the current leader, you need make sure you provide your successor with the tools resources, and information they need to steer the organization in the right direction.

Our Business Law Team Can Assist with all of Your Succession Planning Needs

At Hawash Cicack & Gaston LLP, we know that effective business succession plans are critical to a company’s long-term success. For employees, knowing that the company is well prepared for the future can give them peace of mind about their own career growth. Employees need to know that their industry and workplace will be stable in spite of changes at the top. Turn to our law firm today so we can use our resources to help you draft a succession plan that covers all of the unique goals you have set for the future of your company.

To schedule a case consultation with Hawash Cicack & Gaston LLP, please call (713) 589-7249 or fill out our convenient online form.