The Importance of Succession Planning

If a business – whether a large company or a local SME – is to thrive in the long-term, it is essential that along with looking after their clients needs and providing an excellent service, that they plan ahead. One way to do this is to succession plan.

Unfortunately, two recent surveys have found that many businesses are neglected to put in place a solid succession plan.

The first survey found that two-thirds of businesses do not currently have a CEO succession plan in place; whilst the second survey reported that seventy-nine percent of CIO’s have failed to identify a successor, should they unexpectedly have to give up work.

Succession planning is an important and beneficial part of planning a businesses future, as not only does it enable those in senior positions to delegate responsibilities, but it also gives the successor the opportunity to enhance their skills and knowledge; which in turn will benefit business.

Successful succession planning should be straight forward and planned in advance, especially as rushed succession planning will often hinder the change of a smooth transition, which in turn will hinder business.

Instead, businesses should consider following the example of car manufacturers, Ford.

Reports in early September suggested that Ford’s chief executive Alan Mulally is set to retire at the end of next year; with the same reports suggesting that Ford’s board of directors have already began discussions in regard to a succession plan for when Mr Mulally leaves.

Although Ford has not confirmed these reports, the importance of succession planning is highlighted; and it is worth remembering that succession planning should not be just about when a senior member of your team retires.

Succession planning should also be in place should anyone within your team leave or be able to work; and if you want to ensure you have a solid succession plan in place; why not speak to myself or a member of the Milsted Langdon team who will be able to offer you independent and professional advice.

Milsted Langdon Director, Peter Groves, specialises in strategic business and tax planning, services for high net worth individuals and professionals.

Posted in Blog.