Succession planning is crucial for all businesses. It is vital to have a blueprint in place for how your business is going to run if you or another important employee unexpectedly leaves. Not only is this imperative for you, but it is crucial for your clients as well. No matter the size of your financial practice, it shows your clients that their business and relationship means more to you than simply how you make a living. However, this will only be the case if you have a successful succession plan in place. Read on to discover some of the common errors you need to avoid.
Failing to select someone who meets the future requirements of the company
A lot of financial advisory practice owners look for a successor that they can mold into their own image. Instead, you should be looking for high-potential candidates that have strengths that are aligned with the future growth of the business. Remember, succession planning is about the organisation as a whole, not about you. The skills and the background you had when you started the practice may not be what the business needs to progress in the future.
Creating competition between potential candidates
In most cases, you will outline a number of high-potential candidates, which you will narrow down. However, if these individuals know that they are in the running for the same position, competition can occur. This can have undesirable consequences and create resentment.
Putting succession planning to the bottom of the to-do list
There are so many business owners that have intentions of putting together a succession plan, but there always seems to be something more important and immediate that needs their attention. This can result in an incomplete plan or no plan at all. Nevertheless, the root of this is often fear, as opposed to simply being too busy. The longer you leave it, the worse it gets. So, don’t put succession planning off.
Failing to address disappointments
As mentioned earlier, several people will be going for the same role, and, therefore, there are going to be individuals that are disappointed. You should not merely brush this under the carpet. You need to sensitively approach the issue of why an individual did not make the potential list of successors or was not selected for a new role. If you approach this correctly, you can actually turn it into a growth opportunity for the individual in question.
Randomly select potential successors
Last but not least, not having an effective selection process in place is one of the biggest mistakes you can make. If you do this, you can anger your employees, choose people that do not have strengths or weakness that are right for the role, overlook qualified clients, and you risk choosing people who are not even ready to move onto their next role. Instead, you need to adopt a rigorous approach to collating data to ensure that the right person is selected.
For your business to succeed after you have passed on the reins, or when another senior employee moves on, avoiding the above pitfalls is vital.