The key to a successful management transition is effective succession planning. This process could start as many as 15 years before the business owner intends stepping down.
It is good business practice to include a written succession plan within the overall business plan.
This should contain:
- The key goals
- A timetable of the transition stages - from identifying a successor to the staged, and then full, transfer of responsibilities
- Contingency plans in case the unforeseen happens, such as the intended successor declining the role or realising that they are not suited to it.
It's particularly important that you allow your successor an adequate training period.
One way to manage the training programme is for the successor to gain experience in other businesses. This allows them to gain independence and bring fresh skills and ideas to the business.
You might also allow a successor to gain knowledge of all aspects of your business by spending time working in each area of it. A key advantage of this is that the successor also meets - and is possibly trained by - the key personnel.
You should also consider whether it's best to phase in your departure. You might gradually transfer some key responsibilities to your successor, or possibly reduce the days you work in the business.
It is vital to communicate the succession plan to any family involved in the business, and other management. This will help prevent misunderstandings and future conflict.