Why is Succession Planning Important?


Succession planning tips

Ensuring the stability, development and growth of your company are very important business concerns, which makes succession planning a matter that must be taken very seriously in the same way as any other matter concerning the capital growth and preservation of business.

Succession planning is fundamentally discovering the primary persons who will play the very important roles in maintaining the continuity and development of the company in the future. Simply put, it is choosing the next CEO, while thoroughly evaluating for the qualified, skilled people, who has enough impressive potentials to be effective leaders in the company, and hiring the people who can take the company onto the next level.

Having a comprehensive long-term succession plan in a company is an evidence of a company’s sustainable vision and measurable goal.  The size of the company, be it big or small, does not take succession planning out of every company’s strategic plan. Succession planning is the one thing that could never be eradicated from every company’s strategic planning. While a company is focused towards its goal, simultaneously it should also work on developing the people who could succeed in the company, people who could be useful in attaining the company’s goals.

This allows you to point out the vital people in your organization suited for the right positions. If clients notice employees’ improved performance, they will be confident enough that the quality of service and programs you are currently offering them will be uninterrupted no matter what happens in the future, and the company would gain greater confidence. It also gives you ample time to pass on the knowledge to the next leaders and gives them time to learn and improve. The earlier the prospective leaders are trained, the more things they can develop in the future. To establish an effective succession planning process, consider some critical factors upon doing it.

First, identify the vital positions in your organization. Know well the positions that are significant in attaining your goals and objectives, as well as the risks involved in them. Thus, upon classifying these positions, you also study the risk areas.

Second thing to do is profiling. What skills are needed for each position,who possess these skills and who have the potential to fill up this position? When you have come up with the answers to these questions, you can set up realistic goals, devise development plans and evaluate performance. Conduct a diagnostic test for the various skills sets necessary for your company, so that candidates will get a better perspective of the duties and obligations expected from the key positions involved.

Next, you must thoroughly select the scheme that will best suit the succession planning fit for your company. Pinpointing the system which will effectively serve the purpose of the company’s direction will bring about excellence in the cultivation of the necessary aptitude and expertise of the people in the company.

Finally, you roll out the smooth implementation of your plan. This last step is where you level your expectations from your chosen system.  Here, you make a detailed feedback method to pick up all the observations gathered as you carry out your plan, and carefully identify the ambiguities and areas that needs to be changed or improved.

When you have identified those points, you can then make necessary adjustments to guarantee the success of your strategy and in the future, reach your goal.

About the author: Daniel Jones is a financial analyst who currently resides in Hong Kong. He is also a regular contributor on pension comparison and other financial management topics for different regional publications. He regularly travels to and from Europe and considers Asia as his second home.

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