By: Dean Simmons

When it comes to succession planning for small to medium-sized manufacturers, many think it’s about the company owner finding a buyer for his or her business. In some instances, that is the case. But it can also involve identifying and preparing employees to take over key roles when a senior leader or manager retires, resigns or otherwise leaves the company.

As a manufacturer, succession planning is crucial for the long-term success of your company as it helps ensure the continuity of the business. Whether you’re a small family-owned company or a large corporation, a plan is essential for when pivotal individuals retire or when people critical to your business operations exit the company.

The Merits of Succession Planning

Having a succession plan in place in the event of a change in ownership or senior leadership provides a sense of assurance to the organization and avoids possible disruptions that could affect production, quality, sales, delivery and customer service.

The process of planning for succession involves creating a pipeline of potentially strong leaders and managers for critical roles at your company. Identifying and developing key employees capable of handling more managerial responsibility helps ensure the business continues to operate smoothly when there is a leadership change.

Reducing the Risk

Succession planning can help reduce the risk of losing tribal knowledge from departing, experienced employees. It also helps reduce the risk of losing valuable employees who may leave if they feel there is no opportunity for growth or advancement within the organization.

Preserving the skills and knowledge of a senior leader or manager who leaves the company mitigates the impact of their exit. For highly skilled workers nearing retirement or leaving for other reasons, cross-training programs like Training Within Industry Job Instruction (TWI-JI) can be beneficial.

TWI-JI is a process where skilled workers can pass along the most efficient way to perform a job correctly. This step provides critical knowledge to workers from their departing colleague, providing continued stability to workflow processes.  

For potential next level leaders, exposing them to a TWI Job Relations (TWI-JR) program may reduce the risk of failure in their new role. TWI-JR teaches the essential skills needed by supervisors, team leaders, or anyone who will be leading others. The program shows how to handle problems, how to prevent them from occurring, and how to build consensus for strong relationships and positive employee relations.

Benefits of Succession Planning

Implementing a succession plan can provide many benefits for your manufacturing business, including:

• Establishing a talent development pipeline by identifying high-potential employees who can evolve into future contributors and into leadership positions.
• Minimizing business disruptions by quickly and efficiently filling critical roles and functions in your organization, reducing the impact of key employee departures.
• Ensuring business continuity remains at its peak, leading to innovative initiatives, qualification-based decision-making, and healthy financial performance.
• Increasing employee engagement and motivation by providing opportunities for growth and rewarding career pathways to move up in the organization.

Executing a Successful Plan of Action

Successful succession planning for manufacturers can be achieved by dedicating the time and resources to create a plan of action. 

These steps can help you get started on your succession plan of action:

1. 1. Identify critical supervisory and leadership roles at your company which require top talent to ensure stable and sustainable operations.
   2. Determine the skills, knowledge, and competencies needed to staff those critical positions at your company.
   3. Establish plans for high-potential employees in your organization to prepare them for possible future leadership roles.
   4. Provide training to help probable successors develop the skills and knowledge they need to excel.
   5. Communicate the development plans for valuable employees to make them aware of the company’s succession planning efforts and their roles in it.
   6. Once created, frequently reviewing and updating your plan, and when the time comes, taking the necessary steps, can ensure a smooth transition.

Long-Term Business Success

The long-term success of any manufacturing business depends on a thoughtful and strategic succession plan. It starts with identifying potential successors for vital positions and developing their skills and expertise to ensure a smooth transition when the time comes.

Through targeted career development strategies, you can reduce the risk of business disruption, improve talent competencies, and increase employee engagement. By creating a comprehensive, key employee succession plan, your manufacturing business can thrive for years.