Succession planning

The tragic events of Thursday afternoon, when a Pilatus belonging to Italtile crashed into the sea off Plettenburg Bay, highlights some of the not so obvious dangers of business and the consequences of a lack of succession planning.

I’m not sure whether Italtile have a succession plan in place, but having lost many of their Exco in the crash could have dire consequences for the company.

A tragedy such as this could have the following consequences, should there be no succession plan in place:

If the CEO and CFO are counter signatories to things such as payroll; this function could be frozen. The solution to this is to obviously have 3 to 4 nominated signatories, of which any 2 suffice.

The succession plan needs to be at least three levels deep within the structure. Obviously in such circumstances, temporary or permanent structures will be implemented in order to allow the business to continue. This will probably entail people assuming additional temporary functions, or even moving into new positions. For each move the ripple effect needs to be covered.

If no succession plan is in place, skills will probably be lacking, with no clear direction being possible. The solution to this is to have updated succession plans in place.

 Starting at the top, the CEO should have a shadow identified to succeed him in such an event. It’s not good enough to merely identify someone – skills level needs to be evaluated, and training instituted. This planning must obviously filter down to middle management, so that the functionality of the business can be maintained in time of crisis. This plan should be evaluated twice a year, and updated both in regards of succession and skills.

A spinoff of this succession planning is that it also acts as an incentive for the team. How often have you heard people complaining that they’re in a dead-end job? This is because there’s no clear succession planning; no defined career-path planning; and therefore no co-ordinated skills development.

Succession planning is a well known necessity, but it’s time consuming and often seen as requiring too much input without direct measurable returns. However it is vital, and if correctly applied can effectively form part of the KPI process.