An SME's workforce is critical to its overarching success, yet many SMEs don't have a clear plan for replacing critical talent if they suddenly leave. Succession planning is a hot topic, yet many are unsure of a clear definition. The CIPD defines succession planning as the process of identifying and developing potential future leaders or senior managers, as well as individuals to fill other business-critical positions, either in the short- or the long-term. Whilst succession planning should be seen as important for any business, in our view it's particularly important for SMEs as they are often so reliant on the know how of individual staff. Whether it's their technical knowledge or the relationships with key clients, when pivotal talent walks out the door unexpectedly, it can leave your company in a sticky situation.
The Journal of Accountancy recently cited that as many as 79 percent of businesses recognise that succession planning will be a major issue for their organisation in the next five to ten years. Yet, when it comes to succession planning, it's an exercise that often takes the back burner. If you haven't got a defined plan in place, now is the time to take action. If you can, avoid the temptation of regarding succession planning as a plan for replacing one or two senior managers. Succession planning should be more than that. It should go multiple levels deep, with the ultimate goal of ensuring that you have a robust talent pipeline in place.
Business reasons for succession planning
The primary reason for succession planning is the replacement of key employees. With a plan in place, this can be done smoothly, with a reduced negative impact to the business. Loss of key talent can leave your business with talent shortages in key areas, and without proper planning, those talent 'black holes' could take considerable time to overcome. Identify talent from within and have clear strategies in place for sourcing talent from outside your organisation. Critical staff may leave, but the business world goes on, and you have to be ready for it when it happens.
Another reason which is often overlooked is to support anticipated growth. As a company grows, responsibilities for key talent often grow in parallel, yet, as we all know, any human resource is finite. As time goes on, additional talent will need to be found to support growth. SMEs should look to both internal and external talent to meet anticipated needs. Internal talent should be identified early, and developed where possible through training, secondments or shadowing. Additionally, external talent networks should be maintained and nurtured to ensure that new talent can be brought in when needed.
Tips for implementing a succession plan
As with any plan, it's the forward thinking that matters. With succession planning, it's essential that you look to your business plan and its objectives to guide your succession plan. What are the skills that you're going to need in the future? What are your anticipated areas for growth in the business? Take the time to identify all the critical roles, whether they be strategic, managerial, creative, or technical. Leave no stone unturned, and you'll have a robust plan for the future.
It's important that any succession plan has the buy in of senior management to ensure that the process gets off on the right foot. If you haven't already done so, you'll need to convince senior management of the need for succession planning and its inherent benefits.
When succession takes place in earnest, it's important to note that you should look both internally and externally. When doing so, ask yourself the following questions. Are you supporting the development of your internal talent? How do you identify the talent that should be nurtured? Do you have a recruitment strategy in place for sourcing external candidates? Do you have an employer brand that shows you as an employer in a positive light?
As a final tip, it's also worth mentioning the diversity of your successive talent. Diversity, especially within SMEs should be highly sought after. Diversity breeds innovation, and in these turbulent times, innovation can often be the difference between success and failure. At Capability Jane, we've found that offering flexible opportunities can be a great way to attract top-tier talent that have temporarily stepped away from the business world. If you're struggling to manage your talent pipeline, looking towards untapped talent pools could be a great way to fill the gap.
If you’d like help with your succession plan /recruiting aspiring leaders for your business, please do get in touch with the author Caroline Doherty, Senior Account Manager, email@example.com.