Finding the right people to lead an organization may be a challenge, but it is one that business owners must address. As leaders are generally developed over time, a succession plan should be created as soon as possible to keep it functioning properly over long periods of time. However, a survey from AMA Enterprise found that only 8 percent of companies have such a plan, and a quarter ignored succession planning completely.
To start, a company should define what it is looking for from its leadership. Determining what types of skills and other attributes a leader will have may make it easier to identify them as early as possible. Companies then need to decide whether to develop people from within or to hire outside to find individuals with those attributes. Companies should also recognize that not everyone is suited for or wants to be a manager at some point.
Employers should communicate with those who want to become future leaders by telling them what they do well and what they need to work on. It may also be a good idea to have friendly and focused competition between employees. When done correctly, it pushes potential leaders to do more without leaving others feeling as if what they do doesn’t matter.
A succession plan can also be of great importance when a company is seeking outside investors. People and institutions may be more prone to provide debt and equity capital to a company when they see that it has a solid business plan, and an attorney can often be of assistance in preparing and refining one.