Succession planning requires careful organization on the part of executive management. When accounting and finance professionals in top positions leave the company, managers want assurances that the individuals chosen to fill those roles will succeed with a relatively seamless transition. However, there are certain mistakes that can prevent firms from achieving these goals.
1. Failing to think outside of the box
Managers shouldn’t limit their succession planning strategies to the individuals directly below a certain position. While it may make the most sense to transition the “heir apparent” into the role, don’t limit your options.
2. Selecting the wrong successor
No firm wants to put effort into succession planning only to find out too late the person just isn’t the right fit for the role. This mistake goes hand-in-hand with relying too heavily on the employees who are next in line.
Job descriptions at firms are bound to change in response to trends or unforeseen business challenges. Executives should keep this in mind when identifying individuals to step up to top positions in the future. An employee whose skills and experience once closely matched those required for the job may not necessarily be the right fit anymore.
Sometimes subtle changes in this regard can breathe new life into a company, especially when existing processes aren’t working as well as they used to. Employees may also be more motivated when they feel welcome to step up to a wider variety of roles.
3. Choosing just one successor
Don’t underestimate the need for a long-term approach to succession planning. While identifying one individual to groom for a future role would put your company ahead of 78 percent of chief financial officers who, according to a Robert Half Management Resources survey, have yet to identify someone to fill their own positions, thinking several steps ahead is even more effective.
You don’t even have to consider each and every one of these individuals for the same position. Instead, this strategy simply creates a pool of high-potential employees who could all step up to a number of top roles if necessary.
But don't forget the importance of communication. Be sure to let your successors know about the potential transition and offer relevant training opportunities. Viewing the succession planning process as an ongoing discussion will ensure employees are prepared for the transition.
4. Stopping at the top level
Effective succession planning takes into account all links in the chain. Transitioning an employee to a new role will create a vacancy for his or her original position. Businesses can benefit from expanding the succession planning process to include more than just the top management positions. Focusing on training and developing high potential employees farther down the line is crucial not just for filling open roles, but for maintaining a pipeline of strong internal talent.
Read our syndicated article, “A Succession Plan: Does Your Firm Have One?” to learn more about the best ways to plan ahead for internal transitions.
Photo source: hobvias sudoneighm, via Wikimedia Commons