By Bennie the Bean Counter A hastily chosen or ill-prepared successor can lead a company astray or, in worst cases, mismanage it into bankruptcy. Before you set sail into retirement or perhaps on to your next great professional adventure, make absolutely sure that your chosen replacement is ready to, well, succeed.
Build stakeholder confidence
Perhaps the simplest, most important thing you can do is to put your successor to work. Co-owners, board members and employees are more apt to follow a replacement’s lead if they feel confident in his or her knowledge and skills. And the only way to truly build that confidence is to allow these stakeholders to experience your successor’s leadership style and capabilities first-hand.
For instance, let your successor gain experience examining and discussing financial information for tax and financial reporting compliance and profitability analysis. In addition, allow him or her to spend time among your HR staff to learn about your hiring methods and benefits issues.
Get hands dirty
Don’t hesitate to let your heir apparent get his or her hands dirty. For example, if you’re a manufacturer, let him or her spend plenty of time down on the plant floor to see and participate in daily operations. Or, for other types of businesses, send your prospective replacement out on sales calls to face the challenges of meeting customer demands head-on.
While your successor gets acclimated, you may want to hire an interim manager. His or her objective industry and supervisory experience can be invaluable in training your next-in-line. But you must give the interim manager executive powers, including the ability to guide careers and make employment decisions.
Create a comprehensive strategy
Properly training and preparing your successor is immensely important if you want to truly leave your company in good hands. However, this is just one aspect of succession planning. And it’s never too early to begin planning. For help with a comprehensive strategy that provides security for you, your family and your company, contact Alerding CPA Group at 317-569-4181 or visit our website: www.alerdingcpagroup.com.
This post was written by:
Bennie the Bean Counter
Bennie is a nose-to-the-grindstone CPA who has one simple goal – helping our clients and visitors. Check out Bennie’s Bits under our Blog section. Bennie posts answers to frequently asked tax questions keeping you informed of any new and updated information. He regularly updates his page, so be sure to check back often.