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What to consider when creating a succession plan

On Behalf of | Feb 14, 2024 | Business Law |

Running a business can come with more risks as it grows, making strategizing essential to help it maintain stability. When foreseeing incidents that can disrupt the organization, its leaders should take various methods to help keep operations running smoothly, such as creating a succession plan. It could be a vital resource in case significant positions in the business become vacant unexpectedly because of unfortunate circumstances.

A succession plan often serves as a contingency, allocating responsibilities and roles left in the air due to sudden events. However, it can involve more than lists of potential replacements, including the following considerations:

  • Regular skills evaluations, helping leaders determine who can be viable to take on significant responsibilities
  • Training that can be necessary to prepare employees for uncertain situations
  • Systems that can help make turnover happen quickly and smoothly
  • Sustainability of the strategy over time, including regular updates to accommodate the changing needs of the organization
  • Formal agreements that may be necessary in specific scenarios

Most small businesses can focus on issues regarding ownership and employment, while large corporations may concentrate on protecting wide-scale operations and shareholders’ interests. There is no such thing as a one-size-fits-all succession plan. It can vary based on the business’s size and nature.

Developing a succession plan that works

Creating a succession plan can seem easy, but its effectiveness might only be apparent when it is time to implement it. Unfortunately, the complications accompanying these disruptive events can be equally unpredictable, possibly putting the leaders in challenging situations.

During succession planning, seeking legal counsel for proper guidance can be helpful. Experienced insight can also help cover all issues, including those that may arise from circumstances unique to the company’s operations.