March 27, 2014. As business owners of closely held companies near retirement, the environment of the business can be infected with an air of uncertainty. First, the job performance of employees vying to move up can be influenced by competing for a promotion at the expense of the rest of the team and what may be good for the company. Other key employees can decide to leave as they are unsure what their new place in the company will be when the owner/manager leaves the business. Time can be wasted on rumors and speculation, which can be toxic to productivity and the long-term health of the company. It is helpful, therefore, to both create a succession plan and effectively communicate that plan to decision-makers and key employees in a business when the plan is appropriately developed.
Identifying a Successor. Key employees can be groomed to take on more responsibility and a larger role. When family members may be on the slate as possible successor candidates, it is often helpful to set up specific criteria to pick a successor.
Failing to Act. Succession planning involves difficult and often emotional decisions. It is very common for business owners and managers to put off the process. However, the longer a business waits to consider its options, the few options there are available. A succession plan should be set up to be flexible to change due to market forces, human resource changes, and owner dynamics. A good succession plan can be adjusted to accommodate these changes.
Cultivating Long-Term Employees. Every employer understands that a company’s success depends on the loyalty and investment from its team of employees. Creating identifiable metrics for successors, clear expectations for leadership, and effectively communicating the long-term gameplan will mean greater buy-in from employees. This creates an environment ripe for the success of a business succession plan, as well as the long-term success of a business.
For additional information about preparing employees for a business succession plan, contact the Goosmann Law Firm at info@goosmannlaw.com or call 712-226-4000.
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