In planning for a succession plan, it is important that entrepreneurs consider business entities as separate from themselves rather than an extension of themselves as many people view them (Burke, 2016). In passing over the business to a family member, it should be understood that they should have the core competencies to run the business. Otherwise, the company may not even move on to the next generation. Burke (2016) identifies five principal stages of a succession planning model. The first stage he refers to as business case for proactive succession planning. At this point, entrepreneurs are required to develop a business case that includes a succession planning (Burke, 2016). Such a business model should have a clear vision, mission, culture and values of the company. In this regard, from the onset, the business should have elaborate structures and systems that will stand the test of time. These structures should be able to last beyond current or even successive leadership. They should, therefore, espouse a company that has self-running structures that will ensure smooth transitions that will not interfere with the operations of the company.
The second stage, Burke identifies as the identification of target roles and positions. The aim of this stage is to identify critical workforce segments within the company (Burke. 2016). The identification of these positions should focus on achievement of the company’s objectives in all stages rather than just filling current positions (Burke, 2016). These positions should have the ability to drive the growth of the company at all stages. Every strategic planning should be geared towards not only meeting the company’s current needs only but also the future needs as well. The terms of service by any worker should be in line with the company’s mission and vision. In this regard, it is important for every company to have a mission and vision. The mission and the vision should not only focus on the current trends of the company but also able to forecast rising trends that are likely to affect the business operations in the future and put appropriate intervention measures to accomplish the mission of the company.
In the third stage, determination of core competencies and skills is done. The purpose of this is to determine performance gaps. That is very useful in the recruitment process where talents required to meet strategic goals and key objectives is looked at (Burke, 2016). In this case, even members of the family would have to acquire the necessary competencies that will enable them to help the company achieve its objectives. The human resource department would also be well equipped with what to look for while looking for people to fill key positions in the company. Employees training should form a core part of developing and retaining these core competencies. Employees should be trained to take up the challenges they are running to face in the day to day running of the company. This training should also envision the successors of the current leadership.
The fourth stage involves identifying successors. This stage involves development and implementation of rigorous, competency-based performance management process. Succession candidates are identified within the organization, but this does not limit the company to focus only on internal candidates. A selection process for external candidates who are qualified is established (Burke, 2016). External candidates should, however, be given competent workers who know the inside working of the company so that there is a smooth transition. Injecting of fresh ideas should complement the operations of the business rather than interfere with them.
The fifth stage is leadership development. At this stage, leadership development programs are set. These programs had to take into consideration current and required training and development practices (Burke, 2016). Mentorship programs are part of this leadership development programs. This stage is aimed at ensuring that sufficient development opportunities availed on a regular basis (Burke, 2016). In-service training should be part and parcel of leadership development programs. These programs should identify potential successors to the leadership of the company and prepare them for any eventuality. Even if the company opts for an apparent successor, the existing employees should be able to work with the new leadership effectively and smoothly. They should know the daily operations of the company and be able to identify with the company.
Succession should not be taken lightly by business owners. At the onset, there is the need to have a clear-cut exit strategy for the business. Owners should not just assume when time is right they will sell the business entity, or they will be succeeded by their children. This plan requires a comprehensive approach and focus on all details, which takes time. Whether one plans an internal acquisition, external acquisition or liquidation and dissolution, proper planning is essential for smooth flow of business operations during the succession periods.