Succession Planning

Succession Planning
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You’ve been thinking about succession planning for a while now, but you’re still not sure where to start. How can you protect your business from the threats of disruption in the market and ensure that your company can continue to operate effectively when you are out of the picture? This is where succession planning comes into place.

What Is Succession Planning?

Succession planning is the process of planning for the transition to the next generation of a business or organization. The general idea is that the new leader should have the same or similar experience and skills to the previous leader, as well as being able to lead in the same way.

There are two types of Succession Planning: the planned kind and the unplanned kind. 

  • Planned Succession Planning is a process that you and your organization have taken to make sure that there is a process in place to transition responsibilities and authority, following your inability to continue managing your organization. This is necessary for a healthy organization and ensures you have a process to ensure that the organization continues moving forward without you. 
  • Unplanned Succession Planning is a process that you use as a part of your organization’s continuity plan to ensure that your organization is prepared and has a plan to continue moving forward without you.

Most CEOs or executives know what to do in the event of a company’s death, but not how to plan for the day-to-day running of the business. In fact, most companies will go into administration or liquidation without an effective succession plan in place. It’s a time-consuming and expensive exercise and can leave a company’s assets and liabilities scattered across multiple companies. Good thing that the popularity of the business succession planning process has grown over the years. The process has been proven to help a company avoid the consequences of excessive succession planning, such as poor succession management and succession challenges.

The Executive: Who is a CEO?

There are many misconceptions about what a CEO is. Many people think that a CEO is a person who has the title of CEO, but that is only one part of the job. 

A CEO is a key person in the success of a company by providing vision, direction, and leadership. A company’s success depends on the skills of its key people and how effectively they work together. A CEO’s job is to ensure that all aspects of a company’s operations are well-coordinated so that employees can focus on their job and can perform it well.

More than anything, a CEO’s role is to lead and inspire the organization. In this role, he or she is the leader of the company, and it is his or her responsibility to take care of both the short-term and long-term future success of the organization. This includes preparing the organization for a smooth succession, keeping the company’s vision and mission in mind, providing the necessary resources to achieve the vision, and inspiring employees to perform at their highest potential.

The CEO: Knowing More About His Roles and Responsibilities

The CEO of a company is the leader of that company, and they have a whole host of responsibilities that include running the business, managing employees, and making strategic decisions. Let’s get to know more of his or her roles and responsibilities with the following:

  1. Formulate strategic objectives and direction – As the CEO, your role is to identify and define the company’s strategic direction and direction. You do this through the CEO-mandated strategic plan process.
  2. Carry out proposed plans – The CEO of a small to a medium-sized company is typically a very busy person. The CEO must direct the company’s entire operations, including its employees and its products.
  3. Responsible for budgeting and forecasting – This person must also work to ensure the company’s financial stability, although that role may be divided between the CEO and the company’s CFO. The responsibilities of the CEO are so diverse and so wide that it can be difficult to describe this individual’s role.
  4. Good public relations – The CEO heads the company. This person’s function is to create and maintain the company’s vision, set direction, ensure that the company remains profitable, and help the company to grow. The CEO must ensure that the company is managed ethically and is focused on the future.
  5. Communicating with the company’s board of directors – One of the most important aspects of running any business is to nurture the right culture. Your employees, customers, and partners all look to you for how to approach every problem in the most effective way. When your company is struggling to find the right direction, it’s up to you to take that first step.
  6. Keeps track of the company’s performance – The CEO is responsible for the company’s overall performance and for earning and using the stock options available to him or her. In order to help the CEO to perform these functions effectively, he or she should know exactly what is happening in the company. 
  7. Establish better work culture – While it’s important to ensure that the people you hire share the same values and have a similar perspective of the organization, it’s equally important to consider the organizational culture and successfully establish and shape it. Being a CEO is a very tough job, and you can’t really do it alone. You need the whole team to make sure that you are able to perform your job properly and efficiently. 

Aside from these roles and responsibilities, the CEO also plays a huge part in succession planning. However, when it comes to succession, the CEO is also responsible for ensuring that the right person will take over the organization when the day comes that the CEO is no longer there.

What can a CEO do for the succession planning of a company?

A healthy succession plan is essential for all CEOs and other company leaders. If the right solution for the succession plan is not available, the incumbent CEO will not have the necessary skills to take over the company. The right successor might be someone completely different from the CEO. The latter may be a good choice, but the former may not. Either way, the incumbent CEO will not have the adequate skills to carry out the succession strategy. The right successor must be found, and the succession plan must be revised to take the right decision in this regard.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.