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The Importance Of Succession Planning And How To Manage The Risks

There are a great number of annual or more regular processes that companyu2019s go through, for which they are typically well prepared, such as financial reporting and strategic planning, but when it comes to succession planning, many are not so well prepared. <br>

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The Importance Of Succession Planning And How To Manage The Risks

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  1. The Importance Of Succession Planning And How To Manage The Risks

  2. There are a great number of annual or more regular processes that company’s go through, for which they are typically well prepared, such as financial reporting and strategic planning, but when it comes to succession planning, many are not so well prepared.

  3. Why is succession planning so important? There are benefits to both the individual and the organization when succession planning is carried out, not least that the business can continue to function without a break in proceedings, and is able to maintain its client base and reputation. But, those companies that do start implementing a plan, often falter when it comes down to the nitty gritty, such as making sure the employee identified is ready and willing to advance when the time comes.

  4. What are the risks involved with succession planning? What an employee who’sready for succession looks like varies from company to company, but generally speaking, they should possess the right level of functional experience and have the necessary skills for leading people. Once an individual has been identified (or number of individuals), should they then be told of their position in terms of succession planning, or not? Some organizations opt to be transparent and tell their employees, but there are some very definite risks associated with doing so. Here are some possible outcomes when a successor is informed of your plan, and how you can resolve them:

  5. The individual identified simply doesn’t want to become a successor ● There can be multiple reasons for an employee not wanting to fulfil the role of successor, but provided you know in advance that they’re not interested, it gives you time to identify a more suitable successor.

  6. Others who weren’t identified feel they shouldn’t have been left out ● Succession planning often has the goal of trying to retain the top talent within an organization, but if there are other talented and ambitious employees who didn’t make the cut for any reason, you could risk losing them. To help reduce the risk of offending or upsetting anyone, it’s worth spending time with all employees to discuss the development of their careers within the organization, and how you can help them feel fulfilled and valued.

  7. The timing is off ● It may be that there are some top talent in the organization who are ready to further their development and career before a succession spot can be found for them, in which case it will be important to actively listen to them and try to find ways to keep them engaged and enthusiastic in their role.

  8. An identified employee is no longer required ● Let’s imagine you’ve already lined up a successor for a leadership role; they’ve been informed and are already making their way through the development plan you’ve put together for them. Then, when the time comes for them to fulfil their new role, the company makes the decision (and for whatever reason) that they are no longer needed in the role.Unfortunately, this can have a negative impact on the relationship between the chosen successor and the leader or leadership team, with trust being somewhat diminished. In the event of this happening, the organization must take steps to be transparent with the individual, and inform them of every detail that has influenced their decision, while sharing with them any opportunities for growth that may still exist.

  9. Succession planning is an extremely important aspect of any business, and as such, shouldn’t be neglected or rushed. And whilethere are inherent risks associated with succession planning and transparency, it’s probable that in most instances, the pros outweigh the cons, provided the risks are mitigated and managed appropriately.

  10. At Heyer Inc, we proactively assist our individual and small business clients in meeting their goals. Our key area of focus is ensuring that our clients remain compliant with federal and state tax laws by providing them with high quality accounting and tax services Miami. If you are looking for an individual accountant in Miami, heyer inc would be a right option.

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