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St. Mary's Credit Union BlogWhy Your Business Needs a Succession Plan

Why Your Business Needs a Succession Plan

 

Succession Plan FNL

 

Many Businesses Don't Have a Succession Plan

Change management is always a major concern for organizations, but few challenges are more disruptive than an executive departure.

 

In a new survey from Robert Half Management Resources, only 52 percent of chief financial officers said they have identified a successor for their position.


The research suggests small businesses (20-49 employees), in particular, may be less prepared to deal with potential leadership changes, with only 37 percent of financial executives at those companies citing they have an heir apparent.


Robert Half Management Resources identifies the potential pitfalls for organizations that lack a succession plan:


  • Business disruption — Productivity and operational efficiency are at risk without a contingency plan. An orderly succession ensures that a leadership departure remains a manageable event rather than an organizational crisis.

  • Legacy loss — A company that doesn't engage in executive mentoring and knowledge-sharing can struggle with retention and potentially lose institutional expertise.

     

  • Strategy standstill — High-level executive absences and departures can put strategic decision making on hold and impact long-term projects and initiatives.

     

  • Succession ambiguity — The lack of a defined advancement protocol can hinder internal promotions and undermine organizational confidence, impacting everyone from the CFO aspiring to a CEO role to executives and staff throughout a company.

     

  • Protracted leadership void — Companies faced with an unplanned departure frequently appoint an interim leader to fill the gap while a search is conducted, but it's prudent for executives to anticipate such circumstances to ensure a smooth transition and graceful exit from the role.


Let these points serve as motivation as we head into the New Year. Don’t go through 2019 without a succession plan.


 

 

 

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