Every business owner understands the benefits of setting a succession plan. It can smooth the transition and give everyone a goal to work toward. It provides stability. But is it everyone’s business?
International brand Helen of Troy recently publicized their succession plan. The details of the plan include who the next CEO will be and when they will take charge. The story goes on to explain the buy-in of the board of directors. These are all important pieces of information; let’s look at the impacts of making this information public.
Public confidence benefits public companies.
Any company that is publicly traded and any company that is well-known can see significant benefits from a public announcement of a succession plan. It is well known by now that markets love stability, and a public plan sets the appearance of stability in stone.
Furthermore, people who work with your company will also appreciate this sort of transparency. Vendors and clients all see the continuation of your business as a good thing. They are external stakeholders, and securing the next several years of stability could lead to more business today.
Internal deadlines are more clear.
When you make some piece of internal news public, it sort of has an intensifying effect on your workers and internal stakeholders. Your people have a public promise to fall back on, and it creates more trust. They can truly buy into the plan.
Are there possible drawbacks?
If your publicly announced succession plan breaks down, that can lead to an extensive amount of strife which can be destabilizing. In fact, such instability is even worse, given the previous appearance of strength.
Before making the decision to take your plans public, it is wise to ensure your succession plan is as legally sound and secure as possible. No matter how much personal trust you have in your people, a contract is always better to have than a handshake.