Succession planning is a critical component in preserving the longevity and continued success of an organization. Business owners can identify personnel weaknesses, training needs, staffing needs and which managers should be slotted into expanded positions. Unfortunately, many owners avoid business succession planning based solely on preconceived notions.
Here are three myths that might influence an owner’s decision to avoid drafting a succession plan:
- Succession planning is exit planning: It is not uncommon for business owners to avoid creating a succession plan because they believe it means they will soon leave the organization. While this might be the end goal so the business’s success can extend past its original owner, having a solid succession plan in place does not require an owner to retire anytime soon.
- Succession planning is a loss of control: Many business owners equate the creation of a succession plan to handing over control to the individual or individuals named. In general, a succession plan is not an either-or proposition. Business owners can have a solid plan in place while still retaining control over the organization.
- Many business owners can complete succession planning right before retirement: While some business owners believe that they can draft a succession plan at the last moment, it should not be treated as a singular event. The plan should include gradual steps, including training and transitions. Most often, the succession plan is an iterative process.
Additionally, business owners might be hampered by worries that the next generation of managers is not ready to assume a leadership role. While these concerns might be valid, a comprehensive succession plan is likely the best place to address these issues. The business owner can address any training deficiencies through the plan while getting the next group of leaders ready to take over the organization.