As I discussed in my last post, strategic planning and succession planning both are long term endeavors with significant overlap and many similarities. However, the defining and distinguishing characteristics of succession planning are reflected in the differences in these two very important leadership and management initiatives.
The differences are reflected in the goals, scope, focus and the term of these two endeavors. The purpose of strategic planning is the confirmation of goals and priorities and the optimization of business performance through the effective alignment of business resources with performance objectives. Business resources can be broken down into three general categories: time, people and money. Strategic planning endeavors to optimize synergy, productivity and efficiency by confirming priorities and establishing compatible plans for the achievement of realistic performance benchmarks.
On the other hand, the goal of succession planning is the continuation of success through the next generation of owners and managers. Business performance is a component of succession planning but not the focus. The assumption is that business owners who are Seeking Succession® have achieved a level of business performance, referred to generally as success, that they want their successors to continue, as in succession. The presumption is that no one would want to perpetuate failure. The term business performance as it relates to strategic planning is defined primarily in terms of productivity, whereas business performance, or success, when used in regards to succession planning is much more broad and subjectively defined in terms of productivity and the welfare of employees, management, family members and strategic vendors critical to the continuation of success. The goal of succession planning is not just about productivity; it is about the perpetuation of a legacy and a performance culture that fulfills the needs of current and future owners, managers and anyone who has a vested interest in the business.
As noted previously, both strategic and succession planning are challenging team initiatives requiring the collaboration of a diverse group with various competencies and perspectives. A strategic planning team involves owners and leaders who are responsible for determining direction and performance expectations as well as the key managers who are responsible for the deployment and management of operations critical to achieving the agreed upon performance benchmarks. In contrast, the succession planning team requires a much broader set of core competencies and perspectives and therefore involves a group consisting of owners, directors, key managers and key advisers who are responsible for the ongoing leadership, management, successor development, performance, family interaction, financial planning, accounting and legal issues critical to the continuation of success. The scope of strategic planning includes those who have a role in the optimization of business operations where as the scope of succession planning includes all parties such as advisors, vendors, creditors and franchisers that have a vested interest in the continued success of the business. The expanded team associated with succession planning is the nexus of the succession planning imperative, teamwork.
In my next post, Strategic Planning and Succession Planning: Expertise and Time Frames, we will continue to distinguish succession planning as we consider other differences from its first cousin, strategic planning.
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