A startling number of UK businesses are without a succession plan; according to Legal and
General, around 58%. Understandably, many leaders struggle to consider a seemingly
remote future, especially when markets seem stable. Getting carried away with day-to-day
operations is another reason the importance of succession planning may go unchecked.
However, a watertight inheritance strategy is important to consider on a regular basis and
long before its implementation.
It is tempting to believe that succession planning is exclusively for collectives with an ageing
head eying retirement or a budding youngster up and coming, but the truth is, the longer you
put off drawing a plan together, the harder it will be to react if there is an issue. So why
should you start considering succession planning now?
1. People are living longer than ever before. With the average lifespan on the rise
and more people choosing to work later into their 60s and 70s, the need to consider
exactly what this means has grown. What happens if an executive wants to continue
to work part-time with a view to phase into retirement in the next five years? Is a new
executive appointed? What about an interim solution? Furthermore, the longer senior
members remain in the organisation, the more likely the chances of abrupt changes
to circumstance in the event of illness or death. This will need strategic and financial
attention.
2. Strong performers can be earmarked and groomed for candidacy sooner. The
quicker a potential candidate for succession is scouted, the sooner training, review
and implementation can get underway. Someone who has been groomed for
succession candidacy for fifteen years will be invariably more prepared than one who
was selected in a slap-dash, emergency scenario and, while competent, is entirely
unprepared. Moreover, costs relating to educating and training future leaders are
better dispersed across the year than splashed out in a short space of time.
3. It establishes organisational stability in times of uncertainty. It is understood the
retention rates increase in organisations with succession plans. This is likely due to
the overall confidence that comes with a long term survival plan. Even if a key person
leaves, the professional effects will not be felt and that’s a reassuring position to be
in.
4. Immediate hiring costs decrease. Having a long term succession plan allows a
clearer picture of the current personnel. Aligning the present and future strategies will
reduce any potential mistakes that could be made by hiring unnecessarily between
now and the implementation of the succession plan.
5. Don’t get caught out. While there is not a cut-and-paste method for succession
planning, ‘the sooner the better’ is a wise perspective to adopt. Many organisations
realise that they need a succession plan at the moment of drastic change, at which
point it is already too late. You wouldn’t buy a smoke alarm after the fire has already
started. Long term future-proofing is vital for preserving what matters to you.
The steps above are insights provided by the advisors at The Calder Group. To begin
protecting your future with us, use the contact form below.