Across the United States and around the globe, COVID-19 has revealed many businesses’ weaknesses, and not just in terms of economic stability or supply chain management. No, businesses are all living through a crash course in crisis management and communications, and they’re not all performing well.
The crisis has also revealed the importance of succession planning across business, and why having a clear plan for what comes next—even in the midst of a global emergency—is important for any business’s survival.
Creating a contingency plan
There’s a piece of wisdom among preppers and survivalists that you shouldn’t prepare for a specific situation, but rather for survival in general, and the same is true for businesses. That’s why, when developing a business contingency plan, companies need to stay flexible. One way to do this is by organizing any contingency plan around a crisis management team.
Establishing a crisis management team enables businesses to take generalized knowledge about emergency response—from media relations to who steps into key roles in the event of death, illness, or absence. And, while businesses can’t plan what emergencies come their way, having a crisis management team at least makes broad preparedness possible. Businesses can manage training a few high-level individuals to direct response in different departments, but it’s unlikely they can train everyone.
Planning leadership transitions
A crisis management team plays a key role in communicating what’s happening behind the scenes at a company, but some of those shifts need to be set in order well before any crisis. This is part of succession planning, but according to a Nationwide Business Owner Survey we’ve previously reported on, only 37 percent of businesses have done any succession planning. That’s deeply concerning, and failure to do so can put businesses in the crosshairs in the event of a crisis.
What should succession planning look like?
There are the obvious first steps of identifying who will step into what roles as the situation necessitates, but companies also need to organize the legal elements of this process. That includes writing a formal business succession plan and applying for key person life insurance. The former will prevent conflicts over ownership and leadership roles, while the latter provides financial security in the event that a critical individual dies unexpectedly, something that COVID-19 has revealed to be a worrisome possibility for every business.
The public face of succession
Under normal circumstances, business leadership succession is fairly slow and organized. It’s often underway for several years, often with little public awareness. Crises make succession public in a messy, immediate way, but the good news is that having a plan can set a company apart from the competition. Just communicating the presence of a plan can reassure clients and investors that a business is secure and will survive the crisis.
Another advantage of a clear succession plan: overall preparation. Businesses never want to be in a position where leaders are learning on the job, but that’s especially true in an emergency. A crisis is a terrible time to learn on the job. Succession planning, however, allows companies to communicate what’s long been happening behind the scenes, to come out of the gates with reassuring confidence.
The long game
COVID-19 is just one crisis in what is, for the average business, a long chain of emergencies. This one is only unique in its scope—everyone is affected all at once. More than anything, the current situation has highlighted the need for succession planning and overall emergency preparedness. The only problem is, those who failed to prepare for the current crisis may not survive to see the next one.