Would your business survive without you or your figurehead?
We’ve all witnessed succession planning, possibly without thinking too much about it. Recent high-profile examples of succession planning have seen Manchester United legend Sir Alex Ferguson pass the baton to David Moyes. We’ve also seen Tim Cook taking charge of tech giant Apple following the untimely death of Steve Jobs.
Great leaders recognise one important thing: the show must go on, and this is true whether you are the CEO of the world’s largest company or the MD of a Scottish SME. You can plan for retirement, but sudden illness and death can often occur without warning and leave a business or family in tatters. Taking a holistic view of your business and asking yourself some simple questions will help you plan a business continuity and succession strategy for disaster recovery.
Simple must-dos to prepare business for your absence
1. Create a transition plan
Do you have a transition plan in place? It might be time to start.
Writing a transition plan will let you identify the important milestones you need to cover to obtain a higher degree of business continuity.
Timescale: 1–4 weeks
2. Tell family and business advisors how you want things done
Have you told your family, lawyers and accountants how you’d like everything taken care of when you leave?
Working with your lawyer, write a document that details the roles and responsibilities of your family, professional advisors and employees in your absence.
Timescale: 2 weeks
3. Identify areas of present and future growth and set objectives
What does the company do well? How is the market performing? How are your competitors performing? Do new opportunities exist?Think about the answers to all these questions and write them down, set objectives and actions.
Timescale: 1–5 days
4. Write and review your job description
What skills are required to do your job, and how will they be replicated in your absence?
Write a list of your main duties as well as the intangible things such as punctuality, networking abilities and attention to detail – to name a few examples.
Timescale: An afternoon/evening
5. Analyse expertise gaps within the company
You’ve got the people, but do they have the skills? Identify potential leaders within your company and start drawing up a development and mentoring plan.
Timescale: 1–5 days
6. Have a job-shadowing program
Succession creates an upward cascade effect, where the second in charge moves up to be first in charge and third in charge moves up to be second in charge and so on. Create a plan that allows key employees to shadow other important staff members to learn their roles, responsibilities and leadership challenges.
Timescale: 1–3 days
7. Challenge and test potential candidates
Sometimes, the best way to learn is to be thrown into the deep-end. Give challenging projects to potential leadership candidates to test their responses to difficult situations.
8. Conduct one-to-ones with appraisals and feedback
How do you keep key employees motivated and on-track? Ask them the type of questions you face on a daily basis to test responses. Give honest feedback at all times to ensure they can understand why you would respond in a particular way.
9. Look outside the company
Your most talented employees aren’t guaranteed to want the responsibility of being a leader. Have a look at the job market for new talent to fill your role if there are no suitable candidates within the company. They might turn out to be a great source of fresh ideas.
Timescale: 1–3 months
10. Remove all single points of failure
Are you the only person that can access bank accounts on behalf of the business? Identify all potential single points of failure for business-critical tasks and ensure more than one individual within the company has permission and access to important documents and accounts.
Timescale: 1 week
11. Talk to your accountant about tax
Having built a successful business and a small empire for you and your family, the last thing you want to do is give the tax man more than he is owed.
Call your accountant and ask them to help you draw up a financial plan and ask about key-man insurance.
Timescale: 1–2 hours
12. Consider new ownership models such as employee ownership
Investigate the benefits of employee ownership as well as other business models. Employee ownership is a great way to obtain longer-term business continuity, and also has tax benefits for business owners and employees. There is a lot of support available to help with the transition process.
Timescale: 1 month–5 years
How long would your business survive if the founder suddenly left?
We asked 501 people in the UK how they thought their business would survive if the founder suddenly left, you can see their responses below.
- Almost an even split. 40.7% of people said the business would survive without the business founder whereas 33.9% say the business would last less than a month.
- Over 2/3rds, (71%) of people from Northern Ireland feel confident that their business would survive without their founder. This is the highest in the UK.
- Almost 50% of people (43.9%) from the West Midlands say that their business would not survive a month without their founder. This is the highest in the UK.
- 35% of English people think that their business would last less than a month if their founder left. This is higher than any other UK country.
- Both men and women seemed to answer the survey similarly.
- 100% of respondents aged over 65 think that the business would survive if the founder suddenly left. Is this based on experience?