Business succession plans can help to facilitate a smooth transition when important positions are vacant. Business owners may create succession plans to protect their companies. Executives may have contractual obligations that mandate that they create succession plans after assuming their position within the company.
Like an estate plan, a succession plan may require revisions as circumstances change. What scenarios may warrant a review and adjustment of an existing succession plan?
1. A candidate leaving the company
Succession plans often identify current employees who can hold a particular position. The company may begin training them and helping them acquire the skills necessary to move up within the organization. Choosing someone else to receive that training can be an important step if someone identified as an option in a succession plan retires or leaves for a position elsewhere.
2. A change in job responsibilities
As companies evolve, the requirements imposed on those in leadership roles may shift dramatically as well. If an executive, manager or other professional in a position of authority has drastically altered their job functions in the last few months, their succession plan may need to change to reflect the new demands of their role.
3. An imminent vacancy is likely
Succession plans often address a possible position vacancy caused by unexpected changes. Sometimes, that future vacancy stops being theoretical after a medical issue arises or a professional decides to retire. Those planning to exit their roles in the next few quarters may need to modernize their succession plans and prioritize training viable candidates for the upcoming vacant position.
Creating a succession plan and keeping it up to date can protect a company from difficult transitions. Executives and owners may need to review and modify succession plans when their circumstances change, and seeking legal guidance accordingly can help.