Is Succession Planning required?

Succession planning involves planning in advance to safeguard the future. The reasons for planning could be several. For example a top employee working with the company for decades might be retiring from his/her position. To fill the void the company needs to hire someone who is as erudite as the retiring employee hence a training procedure is designed or an existing employee is handed over the bearings so that the new chief can acclimatize effortlessly.

Some other reasons could be that the top employee could suddenly quit or abscond or fall ill. It is thus necessary to plan before hand. In case a plan is not devised, the company is bound to suffer. The working of the organization will come to a standstill in the absence of a head. Who would make the conspicuous decisions? Not every deal that the company sanctions are known to others. Who would know the company secrets? Who would have knowledge about all the valuable clientele? Lots of unanswered questions lead to a chaotic situation and hence a problem solver is called for.

The lack of succession planning has been identified as one of the most important reasons why many first-generation family firms do not survive their founders. Also, lack of succession planning at various levels within the organization would necessitate recruiting outside talent which may take time in induction process as well as adjusting to the organizational culture.

A lucrative example of succession planning was when the CEO of Ranbaxy Laboratories Limited, India's largest pharmaceutical company, Parvinder Singh believed in running the business professionally and handed over the company's management to D S Brar, a professional (and a non-family member), amidst stiff opposition from family members. Brar transformed Ranbaxy from a small Indian pharmaceutical company into a research based global pharmaceutical major.

Succession Planning is an essential ingredient for the company to run without hiccups. Prevention is always better than cure..

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