Succession planning is a plan of action for passing on leadership roles generally for the possession of any organisation to an employee or group of employees. Succession planning makes sure that businesses continue to function efficiently after an organisation’s most significant employees retire from their position, passes away or resigns from the company.

Need for Succession Planning

The main intent of succession planning is to ensure that an organisation always has suitable leaders in position in case of any sudden occurrence. In the absence of a systematic plan for succession, your organisation might not get another attempt if it doesn’t fit instantly after a central player resigns from the organisation or passes away.

Safeguard Your Business

Business owners get so occupied with the routine operations of their organisation that they generally do not prioritise the concept of succession planning. Sometimes leaders are under the belief that they are too young to get sick with a fatal illness. It is also possible that a significant player is enticed by a competitive company.

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Establish Your Most-Qualified Potential Leaders

A formal succession planning demands your organisation to :-

• Determine the roles which are most crucial for the future success of the organisation
• Recognise internal candidates with the ethics, skills and yearning to take on those crucial roles
• Have a word-to-word with possible candidates about their interests and career goals

Asserts Brand Identity

In today’s cut-throat environment, it takes years of hard work and dedication to establish a company which is successful both in the market and with the audience. If a company’s successor fails to maintain or increase that repute, you can lose significant years of effort. Which is why, it is essential to carefully opt for a successor.

Impactful Strategies

When you are running an organisation, it is essential to follow a robust strategy plan which will benefit you in uncertain times :-

Determine Main Positions

The first step is to identify the positions you require. These are the main positions and essential for the success of the organisation. To prepare an effective succession planning process, all you require is to seek all the positions and know the effect of each position in the recent years and then determine which positions have the most impact.

Analyse Requirements

After you know the main positions, you will require to analyse the criteria and perceive the most essential attributes of the organisation. You are also required to determine principal measures the people are taking on regularly apart from their job description roles. Then prepare a list of requirements which are needed to be eligible for registration in this succession planning program.

Review Voids

The succession planning requirements should entail and review the performance and expectation voids the organisation is experiencing presently or can face in the near future. The HR team must check for the main positions which can fill the voids in the performance level of the organisation and then take necessary actions to find out solutions.

Curate an Action Plan

Based on all the reviews, devise an action plan. Make sure you create a written document which has a structured framework in sync with the relevant strategies needed for the organisation. Pen down your perception and function towards a step-by-step plan to execute it.

Perform Succession Strategies

After the planning part is complete, it is time to put your plan into action. Determine your main people and if the succession is to happen in a brief period of time, inform them in advance so that they have some time to prepare. If the succession is at least 3-5 years down the line, then guide the prospective candidates and observe how they are behaving in the work environment.

Supervise and Regulate

Without necessary regulation, no plan can attain success. Therefore, it is necessary to observe whether these actions are being put into use as per the planning or not. If things are going as planned, then you must proceed further towards the next action. If at any step there are hindrances, then take a pause and prepare for the necessary alterations.

Importance of Succession Planning in Wealthy Families

Succession planning is generally not given the attention that it needs, however it is a significant aspect which must be abided by family business leaders to ensure smooth business continuity for generations to come. In simpler terms, succession planning covers the persistent method of determining and guiding potential candidates to work for the main leadership responsibilities in an organisation. For several family-run organisations, this signifies selecting an heir from the younger generation to take over the business. An adeptly put succession plan ensures a steady and smooth streamlining of both power and management, in the event of unfortunate situations like a fatal illness or death. It also gives confidence to the employees and investors that the organisation will work efficiently even after the Chairman or Chief Executive renounces office.

It is also essential to keep in mind that persistent succession planning is a stable method which is expanded over the years and not a one-time circumstance. An organisation’s assets and reputation are both at jeopardy in the transition phase, therefore, the ideal succession plans take up years in the making and they make sure that there is minimal to no commotion when such necessary changed are in position.

Labuan Foundation – A Tool for Succession Planning

For many years, we often enough hear of the use of trusts in Wealth Management. Although, foundations are rapidly acquiring territory as a potential substitute to preserve wealth. A Labuan Foundation is a widely prevalent wealth management vehicle used for asset protection, particularly for high net worth individuals. Assets which are positioned with or bestowed in the foundation are safeguarded against possible claims from future creditors as the ownership of the assets is transferred to the foundation and the foundation is a separate independent legal entity on its own. A Labuan Foundation is a versatile instrument for wealth creation, accumulation, preservation, protection and distribution upon the demise of the founder.

Labuan Foundation provides a distinctive and extensive asset protection structure, which is significant to HNWI’s and affluent families that seek to safeguard their assets impactfully with succession, estate and wealth planning in mind. QX Trust team of wealth management consultants can facilitate you in offering guidance for your wealth management and succession planning. Book a free consultation session at CONTACT US or consultant@qx-trust.com.

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