When a company only has one person in an executive or ownership role, that individual controls everything about the company ultimately. That person will often have certain systems in place to ensure the continuity of operations if something happens to them, as they may be the only one with access to certain spaces or accounts.
As businesses grow, more people will play important roles in daily operations and the big picture of the company’s development. Bigger companies with more employees have more risks if an executive suddenly becomes unable to continue doing their job.
Not having access to supplier or employee information might mean major disruptions to the flow of business that costs days of work delay or thousands of dollars in lost revenue. One of the ways companies can protect against the risk of future instability is through succession planning.
How succession planning works
Succession planning requires that executives and others who serve key roles at your company create written or recorded instructions to allow someone else to fill their position. Detailing all of their daily operations, recording information only they know and also providing information about how to properly train a successor is all part of succession planning.
Identifying gaps in current training and recording important details about the position and its obligations can mean the difference between someone succeeding in taking over the role or struggling. Some people even nominate their own successors or detail the characteristics they believe would create a successful candidate for the position.
How some businesses integrate succession planning into operations
The easiest way to ensure that succession planning automatically occurs with every transfer of leadership is to make it an obligation. Creating a succession plan once someone understands their positions at a company is a common requirement for executives and other highly-compensated professionals.
If it is a contractual obligation of employment, executives will have to finalize a succession plan as required to maintain their position. Such obligations usually require the submission of a plan after a certain number of months at the company.