The Challenge Of Succession In Planning

A good strategy for planning is the guarantee for the success of the company and its survival!

A succession planning program is a deliberate and systematic organizational effort to ensure leadership continuity in key positions and to encourage individual advancement. Such a planning process primarily involves the identification and definition of the requirements of the positions to be filled and the selection called employees to fill these functions in the future. If succession planning is traditionally this process in many organizations, several environmental factors make it now crucial to the success of organizations of all sizes. Include, for example, the ageing of the population which causes massive departures retired and makes screaming lack of qualified successors. You can also highlight the challenge to recruit and retain employees with high potential in a context of scarcity of labour, while the values and expectations of them are different.

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The fact is that we can’t ignore the increased pace of the growth of business and the number of transactions of mergers and acquisitions of companies requiring rapid formation of leaders with recognized skills. In this context, the absence of succession can slow down and even prevent the adoption of key initiatives necessary for the success of firms. In addition, major strategic changes that organizations frequently need to implement to survive pressure on hiring executives capable of mobilizing the workforce towards a specific goal. Finally, more and more investment analysts take into account the adoption of a formal succession plan to assess the potential of stock market performance of companies. The challenge of succession in SMEs according to a study by the Canadian Federation of Independent Business (CFIB), only an SME owner three (35%) aged between 55 and 64 has implemented a plan of succession and, in the majority of cases, it has done informally. Among those who chose their successor, only 28% spoke to the main party involved. These data are rather alarming since 70% of the owners of SMEs to the Canada intend to retire within the next ten years. Specifically, on 41 percent of owners saying want to retire within five years, half have not yet devoted one minute to their estate. In Quebec, these figures are surprising, since 80% of all businesses are family and represent 55% of all wages paid in the province. In 2005, 70,000 entrepreneurs in these were aged 50 and over.

With the departure of SME owners retired, billions of dollars of assets will change hands and millions of employees will feel threatened. The more they advance in age, less a change in transfer of ownership becomes realistic for entrepreneurs without succession plan, otherwise, many must resign themselves to sell their business to foreigners, mainly Americans. If entrepreneurs in these business have devoted their lives to growing the economy of their region, purchasers do not necessarily have the same concerns. A buyer can even be a competitor of the contractor who wants everything just to buy market share and close the account. Any entrepreneurial succession planning process has many and varied issues. Then consider the aspects human, financial, legal and tax individuals at each company. In the eyes of the current owners of SMEs, the main obstacles to the preparation and execution of a succession plan are the financing of successor (46% of respondents), the identification of a suitable leader (42%), and a buyer the extent of efforts to invest to participate (39%), the assessment of the value of their business (32%), the conflict with the vision of the family (13%) and access to advice at a reasonable cost (12%).

Ideally, an entrepreneur should start thinking about his record at the age of 50 years in discussing with potential successors, developing the skills of the next generation and in agreeing on the mode of transfer of power and property. If it does not take the time to do this planning, it might end up at the last minute in a little advantageous situation. Estimated elsewhere for only 75% of owners sellers having established a succession plan, the latter benefit is, both in improving the stability and the financial results of their SME (because the lenders are less fearful), as in the reduction of the future tax obligations related to capital gains.

These examples illustrate how the management of the estate of employees becomes a competitive advantage, by its impact on the performance of organizations of any size, for several reasons:

It contributes to the achievement of the strategic plan of the Organization and facilitates the achievement of a business strategy. Indeed, it must provide the required leaders to maintain the growth of the business and make acquisitions and mergers; It increases the pool of talented employees to fill key positions by identifying common replacement of staff needs and developing training and staff development programs; it compensates the risks and difficulties inherent in the hiring of external candidates; It provides full access to the potential of the employees, encouraging their development and advancement; It allows employees to have appropriate development opportunities and achieve their career goals; It improves the retention of competent persons; It responds to the increased expectations of institutional investors regarding the preparation of succession plans. The all process of succession in planning: conditions for success estate planning and succession or talent in business management are a source of added value, but they may vary over time and according to the categories of personal.

Experience and research demonstrate that an effective succession management process is based on the following conditions;
If human resources professionals are best placed to oversee the process of succession planning, managers and executives are responsible for its implementation. Talent, succession and succession management is related to the strategy and to the needs of business, values, culture and style of the organization. To the extent that its strategy and goals change, the succession plan must also change to recruit and develop the required workforce capable of meeting the challenges of the future. Professionals and managers are responsible for the design of the process of identification and talent development. They may retain the services of an external advisor in this mandate. Avoid to organize the development of personal management and the management of the estate. Several companies tend to grant promotions to their engineers, vendors or programmers that show the best performance. They thus commit two errors: they lose their best employees and they assign them a role for which it happens that they are not competent. A good succession plan should create new opportunities for candidates prepared to assume adequately.

The service of human resources professionals facilitate the identification and development of talents within the Organization and its business units, where applicable. The identification of talent should follow both a “top-down” approach based on perceptions of the leaders and a more open and transparent approach of ‘bottom-up’ taking into account the perceptions of subordinates and colleagues.

It lists the criteria for the identification of various talents.

Discusses positions, career paths and experiences of work available in the Organization and communicated to staff to optimize their development and their retention. If they have a clear understanding of the opportunities and career paths, employees are less tempted to leave their employer.

Compensation and performance evaluation should be equitable and linked to business requirements to retain the best employees.

Information technology cumulative data on staff, in a process of management of the estate. The choice of software should take account of the criteria of completeness of the system, integration and coherence with other software of human resources, if appropriate, ease of use, flexibility of adaptation as well as technical assistance provider, combined with his reputation.