Succession Planning: Not Just for Owners
If you have ever given a moment's consideration to succession planning, you have probably thought about it in the context of managing the loss of an owner. Typically, the succession planning done by attorneys is geared towards helping a business cope with the loss of an owner, particularly protecting the business itself and the owners' families. An overwhelming majority of businesses will only experience a single ownership succession issue (after all, most will fail after the founder becomes incapacitated, but that's a story for another time). On the other hand, almost every single business that survives for more than two years will face another succession problem: the loss of an employee.
Most companies at the Start-Up phase will over-rely on very limited personnel. Phase 0 and Phase 1 companies do not have the money to incentivize Grade-A talent in the long-term, so these companies will either not attract Grade-A talent in the first place or lose them within 24 months. The loss of a critical employee at this point can set a start-up back months, and sometimes even bankrupt them. Some companies respond by not even seeking Grade-A talent, choosing instead to saddle high-demand tasks with people fighting above their abilities.
Proper employee succession planning ensures that hiring a critical Grade-A employee will not set your company back. As an employer, you must focus on three things:
- Plan Ahead: Do not count on your employee filling out their 2-week notice. Develop a contingency plan for each of your critical employees immediately. Trying to figure out your sales manager's to-do list is hard to do when you're no longer on speaking terms.
- Record: Your critical employees do complex tasks very effectively. They do them so well, they are second nature. It will take their replacements weeks to figure out those tasks, and months more to make them second nature. When your company has not yet taken a product to market, you can't afford months of downtime. Record those tasks as how-to's so their successors will know what to do.
- Follow Up: The how-to's are not going to be perfect when you first get them in place. What will make them useful is working out the kinks. As these how-to's become more polished, they become more valuable. They factor into your company's "turn-keyability." As you build these how-to's, you are also building your company's intellectual property.
Losing an employee is never easy. It can take as much as 30 days to bring some critical employees up to speed. However, losing employees will be the most common succession issue a company will face. With proper planning, a company can turn the potential loss of an employee into a important asset for the company.