The importance of succession planning and appraisals
For small business owners, the dream of creating a thriving business often comes with the vision of a competent, self-sustaining team. A team that can help run the business so you don’t have to work 24/7 and can actually have a life.
However, if I had a £1 for every time I had heard a small business owner say that “some of their team were a PITA” or “they wish they could find team members that cared as much as they do” then I’d be a rich man.
Building a dream team necessitates succession planning and regular appraisals. These practices not only build a highly skilled, value aligned and resilient team but also allow small business owners the freedom to step back and enjoy the fruits of their labour.
Succession planning: the blueprint for continuity
Succession planning is the proactive process of identifying and developing new leaders who can replace old leaders when they leave the business. For small businesses, this is particularly crucial. Without a plan, the departure of a key team member (one that is critical to the success of the business) can disrupt operations, damage client relationships, and hinder growth.
Effective succession planning involves:
- Identifying key roles: determine which positions are critical to your business’s success
- Evaluating potential leaders: recognise employees who demonstrate leadership qualities and align with the company’s values
- Developing talent: invest in training and mentorship to prepare these individuals for future roles before they are promoted
By grooming potential successors, small business owners ensure that their vision and operations can continue seamlessly, even in their absence. This foresight not only secures the business’s future but also reassures employees, clients, and stakeholders of its stability.
A key part of team member retention is them each understanding how they fit in and how they can realise their career aspirations. Succession planning assist with providing this clarity.
Appraisals: the cornerstone of growth
Regular appraisals are another essential component for building a dream team. Performance reviews provide structured feedback, set clear expectations, and recognise achievements. They are instrumental in identifying strengths and areas for improvement (skills and value alignment), aligning individual goals with the company’s objectives, and fostering a culture of continuous improvement.
Key benefits of appraisals include:
- Enhanced communication: appraisals create a formal, structured space for open dialogue between an employee and their line manager
- Employee development: constructive feedback guides professional growth and skill development
- Motivation and retention: recognition and rewards from appraisals boost morale and reduce team turnover
For small businesses where each team member plays a vital role, these regular evaluations ensure that everyone is performing at their best and moving in the same direction. There is alignment and a joint sense of purpose.
I often hear small business owners say they do not have time to plan and deliver regular appraisals. But they finish up needing time for worrying about poor results and toxic team members, undertaking disciplinaries, exiting members of the team that aren’t performing, replacement interviews, induction, training etc.
You get the picture. Invest in the team in the short term and save yourself a whole host of time, energy and money in the medium to long term.
One thing not to forget is that engaged and happy team members, not only stay but become advocates of you as an employer to their contacts. It is difficult enough attracting talent without turning your team into detractors.
Achieving freedom through Business Planning
Succession planning and appraisals are not just about maintaining the status quo; they are about fostering an environment where a business can thrive independently of its owner. One that can do this will scale and is a key element of being saleable.
With the right people in place, trained and motivated to excel, business owners can step back, knowing that their business is in capable hands. This freedom allows them to explore new opportunities, focus on the growth of the business, or simply enjoy a well-deserved break with their friends and family.
Every client we work with has their future dream team mapped out, a plan of how they will transition to this and an appraisal process in place to maximise retention and results. It is a key part of every business plan we help to produce.
For small business owners, aiming to build a dream team and gain freedom from daily operations, succession planning and appraisals are indispensable tools. They ensure continuity, drive performance, and ultimately, create a sustainable, self-sufficient business.
You can’t afford the time to introduce and deliver appraisals? From my experience, you can’t afford not to find the time.
It is never too late to get started.
