Bad news. Bob just got hit by the proverbial bus. He’s not coming in to work today – which is too bad because he’s the only one who knows how this essential process works or has the knowledge required for that vital procedure. No succession plan? That’s ok: go into crisis management mode and scramble to find people who can, maybe, fill the gaps. Everything should be just fine. Lack of succession planning seems ridiculous if you put it that way, doesn’t it? It certainly does.

A Plan for Survival

Every company needs a succession plan. End of story. As CEO of Dale Carnegie Training Peter V. Handal puts it: “What succession is about is building the bench strength so that people that are in the company now, or that will be brought in will be able to carry the company forward in the future. It’s not just a nice thing to have – it’s really the essence of any business.”

When? Now.

The “why” behind succession planning is fairly simple. Sometimes you know what’s going to happen tomorrow; sometimes you don’t. In either case, you have to plan. In addition to unexpected losses, leaves, or departures, contingencies are essential when:

• Employees are ready to exit. Sometimes, they just tell you. “I’m ready to move on to something else.” It could be a high-level executive or a mid-level employee. In either case, this person may be in the process of imparting knowledge to someone else – a potential successor. This should be formalized.
• They become disengaged or work suffers. If they don’t tell you, their work might. You may notice that an employee’s work starts suffering. They don’t appear engaged or are not effective in their roles any longer. You need to tell them directly, “If you’re not in this, then we need to start transferring your knowledge to someone else.” Work with them. It’s not the end of the world for them, or for the company. This happens all the time. Just bring the situation to light so you can plan properly.

The “how” works a bit differently, depending on the size of the company or its stage of growth.

Planning for Small Companies

Say you’re a startup with about 10 employees. You still have 3 – 4 key roles, and maybe a subject matter expert, for which you need to plan. If, at this point, you’re too small to draw from an internal well of talent, figure out who in the marketplace would be a good fit. Even if you can’t bring them on now, you can start a dialogue, and keep it going.

Let potential external successors know that you’d like for them to join the organization at some point. Paint for them a bigger picture of what the organization will be, and how, once they join, they can play a key role in helping it continue to grow and thrive.

Another option, and one that can take place concurrently, is developing internal candidates for key roles. Say Bob is the head of finance. If, after he has his unfortunate run-in with the bus, you have no one onboard with enough experience to take over, it can cripple your company.

You need to start sharing information and training people early. Even if it’s just pairing people, you have to start the transfer of knowledge so people at the lower ranks can pick up the pieces when – not if – something happens. Will a junior staff have all the knowledge that Bob the CFO had? No, definitely not. But you have to start somewhere, and this way, at least you’re not starting at zero.

Planning for Large Companies

If you’re a bigger company, you’d better have someone assigned to each key role. An organizational chart should identify not only C-suite roles, but other critical positions, such as managers and department heads. Ask: “Who do we have to fill the role if Joe decides to take a job somewhere else?” Or, “Who can step in if Sue decides to get off the corporate track?”

All the Joes and Sues need to be working with, training, and imparting knowledge to potential successors. That way, when they leave, quit, retire, take leave, or, for whatever reason, cannot or will not fill the role, there is someone there to step into their place. And remember: bench strength. Why have just one potential successor? If you plan two or three deep, you will have more options.

Without succession planning, companies fall into crisis mode. They may not have the talent they need to continue to grow or succeed. They say that “failing to plan is planning to fail.” That’s too true for businesses who don’t look ahead. Succession planning really is planning to succeed.