Do you have a succession plan for your construction company? If you don’t, you’re leaving your entire business open to a number of risks. Unfortunately, a number of companies (both in construction and in other industries) don’t have succession plans. There are a number of reasons for this, but none of them are good. Succession plans are vital to ensure that your company continues on should something happen to you or to other key members of your leadership team. If you don’t have a succession plan, learning about the risks that come with ignoring this vital document may make you change your mind.
Why Don’t You Have a Succession Plan?
Before looking at the risks, let’s take a look at why businesses tend to skip succession plans. Some simply don’t realize that this is something they need to plan out. They assume that they will always be there to make important decisions or to find people to replace those who suddenly leave. Others may be fairly new business owners and haven’t thought that far into the future. Their company is so new and small that they don’t see the need for succession plans yet.
Others may not have suitable successors in the company or may have delayed their retirement due to the recent recession. Others may have thought about retiring and may even have selected a successor, but now find themselves unwilling to go through with it. They decide they’re not ready to give up their company yet. While this may be fine for the moment, there will come a time when every business leader leaves their company in one way or another.
What Happens if You Die or Are Injured?
What will happen to your company if you were to die or if you were injured to the point that you were not able to make decisions for several weeks or longer? Do you know who would step in to lead the company? If you don’t, the person who does succeed you may not be who you want. It’s also possible that they don’t have the training or knowledge to step into your role smoothly. Your company could go under quickly due to mismanagement.
Even if you’re not the one to become incapacitated, it’s possible one of your key executives could be. One of your company leaders could also unexpectedly leave for a different job. What would you do? Who would step in and fill that role?
If you had a succession plan, this wouldn’t be an issue. You and your leadership team would know who was next in line. Those chosen to succeed key personnel would also have already started learning about the positions they would step into. They may not have all the training and knowledge they need yet, but they would have some, and they would be willing to learn. If someone else is pushed into a management position they might not necessarily want, they may not even try to learn how to do the job.
How Can You Retain Bright Young Employees?
Do you have several people on your construction crew that you can see going far in the company? If so, how do you plan on cultivating their leadership skills? How are you going to keep them with your company when there are other opportunities they may want to pursue?
Having a succession plan is one way of recognizing those who have the talent to move into management and leadership positions. By letting these employees know that you have noticed their abilities and want to prepare them for leadership roles, you give them a reason to stay with the company. They know that when those upper positions open up, they’re slated to move into them.
You do have to do more than just write these employees into the succession plan, though. You also need to begin training them for their future jobs. It may take years for your current CFO, COO, and other executives to retire, but that doesn’t mean your successors shouldn’t start learning the job now. At first, you may just have them attend a few conferences each year or spend a day here and there shadowing executives. When you know one of your leaders is preparing to retire or leave; you can increase the training.
Are You Ready to Make a Plan?
Now that you have a better idea of what risks you face without a succession plan, are you ready to create one? If so, there’s one more risk you need to avoid: creating your succession plan on your own. You need to bring your leadership team together and really think about how you want to identify successors. Sometimes an employee you think may be perfect may not be. By bringing together your top executives and supervisors to discuss who should be considered for succession, you can make the best choices and ensure your construction company’s future.