As the owner or an executive of a business, a big part of what you do is ensure that everything keeps running even when problems arise. You probably depend on your executive and management teams to handle the details of different areas of the business.

What would happen if one of your most trusted managers or executives suffers a brain injury in a car crash? What if they have a heart attack and couldn’t come to work for several months? Having each high-ranking employee in your business create a succession plan is one way to ensure that your business continues to operate regardless of what happens to individual staff members, regardless of their title.

Why succession planning is so important

The manager who oversees the entire human resources department may be the only one with the passcode to the payroll system or the pin number to your secure storage facility. The head of your accounting team might be the person with all of your bank and credit card login information memorized so that they can quickly and easily pay the bills. The person handling your manufacturing team may be the only one familiar with the details of certain business practices.

The information that managers and executives have in their minds is critical to their ability to perform the job. A succession plan usually involves them putting that information into one cohesive document, along with recommendations for their successor. The goal of succession planning is to allow someone to review a document and effectively take over the responsibilities of the person who held the position before them.

What could happen without a succession plan?

If something were to happen to you or another high-ranking employee at your business without a succession plan in place, it may be difficult for other people to fill their role at the company. There may be information that no one else has that may be necessary for things like paying your bills or continuing operations.

Without a succession plan, you could lose control over bank accounts, have issues with company performance and struggle to fill the vacancy the individual leaves behind. With the succession planning in place, existing staff and management can assume the responsibilities that an individual once fulfilled. Additionally, when you hire someone new, a succession plan will make it that much easier for them to acclimate to their new job. These benefits far outweigh the cost involved in making a plan.