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So who is looking after the business while you are away?

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While you are away from your business………

Illness, business matters, family commitments; annual vacation or just an emergency may take you away from your business for a short or extended time frame. When this happens who is left to keep things running and how does this impact the short and long term performance of your business.  Succession planning, disaster recovery or back up plans are a vital part of the continued and successful operation of any business.

What are the potential effects?

Some of the critical issues requiring consideration in the event of an intended or unintended absence of leadership / management are

  • Continuity of business: Organizations could negatively impact the delivery of its service or product to its customers and target market if they close doors or disrupt operations due to the absence of any staff.
  • Maintenance of quality and standards: Organizations seek to maintain quality in spite of changes in staff or management; if absences or changes mean that service or products are not delivered at the desired standard then this could potentially lead to loss of current and future business.
  • Staff morale may be better or worse with major changes in management and leadership. It is useful to monitor the effects of different leadership on staff output and management of resources.

In the short term the effect of the absence of regular management may slow down or disrupt operations and in the longer term lead to a decline in the perception and performance of the organization.

Key man risk

Where the business is dominated by one key individual without whom operations are unlikely to continue effectively, there may be considered a ‘Key Man Risk’. Some providers of finance or facilities require that the key individual in the business be insured, with the provider standing as beneficiary. This is to protect their investment in the event that the major promoter can no longer function as required. This risk is typically mitigated by the presence of potential alternatives who can step in to the role without too much effort.

Critical functions

Within every organization there are usually a few key or critical roles that can impact operations. It may be the person who operates one particular machine; the person who has the keys to the front door; the pastry chef; the quality assurance officer; the specialist etc. The owner’s role is to recognize and identify these positions and have a backup plan.

The Back-up

Small business owners typically say they cannot afford to have 2 people for one role.

  • An alternative option is in the hiring process to try and attract individuals who are versatile and while the businesses is growing can either multi task or serve as designated back-ups for a particular role.
  • Owners can also where possible for their type of business develop a list of individuals with the required skills who can come in on a short term or part time basis to cover each of these critical roles should the need arise.
  • Ensure that everyone knows who the designated back up is and provide development opportunities for the individual by allowing them to shadow jobs or act on relief. Training for these potential positions and assignments should be accommodated in the annual development plan.

Succession Planning

As part of management strategy and plans, there should be a clearly agreed plan of how to approach the inevitable point when a successor is required to take over the reigns of the organization or a unit. This is best accomplished when there is no immediate need and should be part of long range planning. With knowledge of the required skills and competencies for the role, management should institute a process for identifying and grooming potential successors for specific roles.

Disaster Recovery

In some unfortunate cases while the owner or main staff is away accidents or disasters do occur. The ability of the organization to recover and resume operations can be a function of the emergency plans in place. Who does what and the location of documents, assets and resources must be documented and communicated to all people who would be involved in carrying out operations after an event such as fire; flood; building collapse; mass resignations etc.

It is good management practice to take a break and to be ready to step aside when the organization requires it. Most people want to have a qualified and competent alternative in charge when they are not there. What is going to happen when you are away depends on the steps you take in planning for these eventualities …. Or not? It is said that it was not raining when Noah built the ark!!! Owners need to plan ahead for eventualities.

Alpha Learning

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