Almost half (43%) of family-owned businesses do not have a succession plan in place, and only 12% of family businesses make it to the third generation.

As the saying goes, fail to plan, plan to fail.

Succession planning helps businesses of all sizes continue operating normally when changes occur.

One of the most common problems is people not giving succession planning the time it deserves early enough. This can lead to intense pressure later. Poor succession planning can lead to substantial financial losses.

“We provide training to a number of family-owned SMEs and I see many of their owners continuing well into their retirement years because they don’t feel confident handing over the business,” explained Sarah Temperton, Chief Executive of NLT Training Services.

She added: “Having a succession plan with leadership and management training incorporated within it can offset a lot of these concerns and pave the way for the continued success of a business with new leadership for many more years.”

The rule of thumb is no less than five years (ideally 10 years) to begin building a succession plan. Effective retirement and succession planning is vital for your organisation’s continuing success.

A key component of succession planning is identifying your rock stars. These are the people already within the business who would make good successors for critical roles.

One of the benefits of promoting from the home-grown talent pool ensures that there is already a high degree of organisation-specific knowledge.

Succession planning identifies the most promising employees. It then offers the opportunity to develop these employees, so they are ready and prepared to fill key roles.

Here are five ways to develop your rock stars:

  1. Have open conversations

Is everyone in your organisation on board with the succession plan? Do your rock stars see their future with your organisation? Have they any concerns? These are all questions that need to be answered up front and honestly before you invest time, energy and money into their development.

Clearly communicate the succession planning process and its outcomes to stakeholders, including potential successors, to manage expectations and ensure transparency.

Transparency helps to align the workforce with your organisation’s vision and goals, ensuring that everyone understands the role they play in the company’s future success.

  • Identify strengths and developing skills

Beyond evaluating the past and current performance of your rock star, consider areas in which they may be weaker. For instance, they may have a wealth of operational experience but lack leadership and management skills. 

Where there are competency gaps you can provide additional training, like CMI Leadership and Managements courses, or relevant and meaningful mentorship. Mentors can focus on addressing the areas where your rock star requires growth, so they are ready for the business-critical role.

  • Invest in professional development

Help employees reach their full potential with additional training. This can be a mix of on-the-job training, industry conferences and networking, as well as formal learning like industry recognised CMI Leadership and Management Level 5 and 7 courses. It’s important that the business gives employees time to learn during their working day, particularly if they are doing a formal qualification.

Taking around 18 months to complete, Level 5 and 7 CMI courses are designed for practising or aspiring managers and leaders and will give them the instruction, guidance, and direction to lead and manage an organisation.

  • Sideways moves for a new perspective

Exposing your rock stars to varying tasks and responsibilities in the organisation, enables them to obtain a big-picture view of the company as a whole – a perspective necessary for success in many top-level roles.  Sideways moves into different positions within a business also keep employees engaged by offering the opportunity to meet new challenges.

  • Harness the expertise of your senior workers

Use mentoring and coaching to facilitate knowledge transfer and leadership development. A business leader or senior manager could work alongside their successor for 6 -12 months, then continue part-time in a mentor-style capacity to support key decisions as and when required. Be sure to allow enough time for them to pass on their contacts, business and client insight, processes, tips and to help smooth over any issues while they are still around. 

Prepare the mentors and coaches within your business with additional training. CMI offers Business Coaching and Mentoring at Levels 3 and 5, which are specifically designed to help operational managers who are involved in coaching and mentoring individuals and/or teams.

To learn more about how NLT can help you incorporate CMI’s industry-recognised Leadership and Management and Business Coaching and Mentoring courses into your succession planning, call Sarah Temperton on 0333 8803540 or email us at enquiries@nlt-training.co.uk.