Sometimes succession is predictable, planned and welcomed, e.g., a mutually beneficial, sought-after merger or desired retirement. Sometimes, it is both unpredictable and unwanted, e.g., death of a majority shareholder, liquidation of a company and its assets or a hostile takeover.
Crucial to this process is a business succession plan that includes not only the details of succession when its time comes, but also the preliminaries to the framing and creation of the plan, even for small family businesses.
Business succession is the plan for what will happen within an organization following a change. It puts into place procedures for filling positions, reassigning assets, settling debts, etc.
Managers, owners, and partners should specify who will take authority and what should happen within the organization should there be any change in the organizational structure. Human resources departments help in succession by defining jobs, keeping track of eligible candidates for openings, and seeing that employees receive adequate training and preparation. Employees are responsible for preparing themselves for new roles and responsibilities when change occurs within the corporation.
There are many situations that call for a succession plan. They include restructuring, retirement of individuals, and merging, to name just a few. It is a good idea to have a plan for succession in place even when there are no changes planned. This can help the organization to continue to thrive in the face of unplanned absences, death, or other unforeseen circumstances.
Several benefits of having a succession plan exist. A plan ensures that the properly qualified people are placed in positions that will further the prosperity of the organization. It also prevents the loss of profits, and helps employees adjust to coming changes by keeping them involved and well-informed. Further, it allows decisions to be made in the absence of key individuals.
There are many resources available for planning business succession. Organizations can do research and form their own teams, or outside firms can be hired to assist an organization every step of the way.
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