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Continuing a business beyond one generation of leaders requires extensive planning. Devising a formal plan, which outlines who will own and operate the facility once you are not in the day-to-day role, is a critical decision that has a direct impact on long-term business profitability.
Succession planning isn't an exact science since there isn't one approach thats right for every situation. However, business owners should focus on the following five steps.
1. Choose Your Successor
Examine all employees who have the skills and ability to lead the facility. If you have difficulty narrowing the field, seek the advice of your board of administrators or form a search committee. Experts generally estimate succession planning should begin 15 years before you intend to retire. This way, you have time to oversee your successor as he or she learns the business and hones their skills.
2. Develop a Formal Training Plan for Your Successor
Identify critical functions of the facility. Then, have your successor work in each of these areas. Allow him or her to learn, grow and make mistakes before assuming the helm. By creating a culture that encourages the person to take charge within broad guidelines, you establish space for your successors style to fit with your broader business goals.
3. Establish a Timetable
Set up a timetable for shifting control of the facility and pinpoint whos in charge of what and when. A timetable helps motivate your successor to move through his or her training program quickly and successfully, with a clear understanding of the coming roles and responsibilities.
4. Prepare Yourself for Retirement
It's important to outline a plan for your transition. As your successor takes on more responsibilities, spend time planning how you'll continue to be energized and involved in other activities.
5. Install Your Successor
Ultimately, your successors success or failure is up to him or her. You can lay the groundwork, provide the training and establish a culture for your company. From there, senior management and the board of administrators are the support system and checks and balances.
While succession planning is a challenging task, its worth the reward of watching your care facility grow and succeed in the next generation. As you work on your succession plan, seek outside advisers such as your accountant, attorney and your investment or insurance professionals, since your succession plan will have far reaching impacts from a tax, investment and legal perspective.
ABOUT THE AUTHOR
Dan Klaras, an executive management leader and board member, is President of Assurance. With more than 30 years of experience, his responsibilities lie in directing all property and casualty insurance practices, as well as the overall sales management and producer acquisition strategy of the agency. As a result, Dan is charged with leading producer education and development and generating new property and casualty products that drive value to Assurance clients. Dan received a Bachelor of Arts degree in Business Administration from Hamline University in St. Paul, Minnesota, and served on the National Workers’ Compensation Reinsurance Pool Board of Governors for three years.