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How do I implement an effective succession plan for a company?
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I like a simple nine box: on the vertical access, historical performance: low, medium, high and on the horizontal access, potential/agility: low, medium, high. build your compensation models, learning models, development models, coaching models, exposure to executive and senior leadership models, and project assignment models based on where your people fall into these boxes. those falling into the high historical performance and high potential/agility box are obviously the first in line for succession/advancement. start with simple, start at the top, and build it out from there.
I am talking at a national webinar on Aug 25th on this topic hosted by HR Options. http://www.hroptions.com
First it is not easy and will depend greatly on size, industry, ownership structure and exit plan for the owner and their ownership value.
A large public traded entity will operate in different succession planning environment than a closely held private manufacturing firm that is currently run by the 4th generation of family members.
Below are 10 questions I am sharing with the group during my webinar.
These questions will help you explore much of the context that will impact the plan's design, selection of candidates, development path, recruit/reward/retain tools and systems and the likelihood of success for any succession plan.
This will give you some sense of the lay of the land and hopefully enable you and your management team gain agreement and alignment on the strategies most likely to build and protect enterprise value while unlocking substantial opportunities for growth and reward for key employees.
- Owner objectives (personal, professional and financial) and currently imagined exit routes (third party sale, internal transfer, ESOP, etc)
- What is the company ‘worth’ and how commonly calculated
- What are likely growth opportunities – Organic
- What are likely growth opportunities – Inorganic (M/A)
- What is the family situation: Active and Non-Active members (yet?)
- How effective are current implementations of people based drivers of enterprise value (non-compete, retention, productivity, engagement, expenses, ratios, benchmarks)
- What is the plan for business continuity (disability, death, divorce, departure) – banking, ownership, etc.
- What is the current executive bonus strategy (recruit, incentive, stay, etc) and form (stock, cash)
- How would the current team and internal successors be viewed by the different potential buyer types
- Who are the key advisors (CPA, Attorney, Benefits, Retirement, HR, Management Consultant, Executive Coach)
My company is a korean base company operate in Malaysia. Currently we have 500 staff s comprised of local and foreign staffs. Furthermore, we have 5 senior manager from different departments. The five manager are the staffs which capable replacing the Managing Director in five years. How could i develop a succession planning ?
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