Succession Planning: Crucial Preventive Medicine
| Publication year | 2000 |
| Pages | 14 |
| Citation | Vol. 13 No. 3 Pg. 14 |
Steven G. Johnson.
An area of practice often ignored by attorneys is that of risk and crisis management. Attorneys advising businesses of any size can play an important role in identifying potential problems, assisting in drafting crisis management plans, and training officers, directors and management staff to prepare for and deal with problems that could arise in the business.
One aspect of crisis management that many business owners tend to avoid is preparation of a succession plan for key company personnel. Usually companies have advance notice of changes that must be made with key personnel-an employee approaches retirement age, a prolonged illness requires an employee to spend less time in the office, and so forth. But heart attacks, strokes, auto accidents, unexpected ailments, recreational accidents, or a crucial employee's unanticipated resignation or termination can instantly affect a company. In particularly sad situations, an accident may claim several key employees at one time, which can devastate the company.
In any of these situations, the company will likely feel a great loss, even with an effective leadership succession plan. If there is no such plan, the company may experience corporate disorganization, loss of corporate opportunity, negative press coverage, loss of customer or market share, and low employee morale. These problems may continue for a long time, even after the lost employees are replaced.
In early 1996, a prominent Salt Lake company lost several key employees in a tragic accident. The company had no succession plan. Despite an ongoing cross-training program, it took many months for replacement personnel to be appointed, and then many months after that for the new management to learn the business and the market and to become effective. Counselors were brought in to assist employees through the difficult grieving process. Said one supervisor, "You can't imagine until you've gone through it how devastating that can be .... My employees were falling apart at the seams." Employees felt a great weight taken off their shoulders when the replacement personnel were finally appointed. In the meantime, though, potential business opportunities were lost and company direction struggled.
Although a succession plan would not have completely avoided the tragedy and its negative impact on the remaining employees, it could...
To continue reading
Request your trial