When running a firm, you need a business continuity plan to ensure orderly leadership transition in case one or more key people leave, no matter the reason. Leaders, whether owners or managers, may leave because of retirement, death, a disagreement over strategy, or a job opportunity at another firm. Planning is crucial — and an important part of any business plan — and can come in handy in the event of the unexpected.
Firms that address continuity planning are more likely to continue their success. They’ll have the skilled leaders in place to maintain their momentum. Those that don’t pay enough attention to this important task may struggle as they try to figure out next steps.
To be sure, it takes time and a thorough analysis of your workforce to develop bench strength at key positions throughout your organization. You’ll need to pinpoint individuals who seem well suited to serve in more senior positions. It may also require an examination of insurance products that can protect a company against personnel losses. But the benefits are potentially significant. Below you’ll find a number of issues to consider as you develop a continuity plan.
Developing a Business Contingency Plan
Every firm is different and it’s important for businesses to develop continuity plans that address their circumstances. Managers must determine how the departure of a person can affect the firm. They should examine key roles throughout an organization and how the absence of an able replacement might weaken the organization. Such an analysis might take this form:
- Business impact: Identify how a key person or persons leaving the firm would affect current and future projects, revenue, and business processes.
- Current provisions: Ensure that there is an able replacement for important jobs and a policy for them to seamlessly assume their new position. What are the gaps in succession planning? If someone were to leave, who would take charge?
- Develop a plan: Establish how you can fill in gaps in your succession pipeline. That can include training additional people for that role or backing up sensitive information so it’s available to more than one person.
- Training/updates: Train potential replacements for the jobs they might fill. Have them perform some of the responsibilities they may one day assume or give them exposure to a higher-level position through projects and training programs. Assign one or more people to review succession planning and the progress of promising employees. Revisit the process at regular intervals, such as yearly or more frequently.
A business continuity plan, in a sense, is emergency planning. The loss of talented managers can hurt a company’s performance as much as a computer virus, a misguided strategy or a warehouse accident. Smart companies are quick to say that they are only as good as the quality of their workforce. That’s why it’s crucial for you to ensure that you have processes in place to ensure your firm has the best talent at all times.
Read more about transition planning on the page of AIA Trust Ownership Transition Resources by clicking here.