What is succession planning?
Succession planning is a proactive process of identifying roles at the core of the organization and then implementing a plan for keeping those roles filled with qualified and capable employees, for the short, medium, and long term. While each organization will have its own succession planning definition, this strategy focuses on identifying and growing talent to fill leadership and business-critical positions in the future. It involves continuous discussions about talent, resources, and action-oriented planning for the future.
Organizations need a succession planning strategy for understanding the strengths of their current resources and people’s motivations and aspirations for the future. With this data, organizations can identify gaps between the ideal talent landscape for critical roles and the current options. Once these gaps are identified, organizations can adopt strategies to address them by implementing and maintaining processes to attract, acquire, develop, and retain top talent.
Why is business succession planning important?
Businesses that regularly discuss talent and have a good understanding of their future needs give themselves a better chance of adapting and responding quickly and effectively in the face of change. Strong talent is always in demand. Proactively and strategically investing in the development of existing talent to prepare them for future leadership and business-critical roles gives organizations a competitive edge.
Effective succession planning processes also enable organizations to make sound financial decisions around their future staffing needs, ensures key knowledge and expertise are transferred appropriately when critical employees depart, and supports business continuity during times of transition.
How does succession planning work?
Succession planning is a business strategy that prioritizes business continuity by preparing current capable employees for critical leadership roles. From identifying specific roles that require a succession plan to developing and executing leadership training, and analyzing quality candidates, replacement planning can be time-consuming and may require a lot of effort from senior leaders and HR professionals.
What is the connection between succession planning and talent management?
Succession planning goes beyond the simple creation of a plan; organizations must have a strategy for bringing that plan to life and keeping it up-to-date with any internal (e.g. structural) or external (e.g. market forces) changes. Talent assessment processes support succession planning by providing insight into strengths and skill gaps within the talent pool, enabling effective successor identification and development.
What is involved in succession planning?
Succession planning starts with future requirements in mind. What roles and people resources will the organization need to be successful in the future? Most succession planning strategies focus on mission-critical roles and responsibilities, so these should be identified first.
Typically, succession plans cover all leadership positions and some specific expert roles that require deep expertise. An effective succession planning process then identifies feasible options for replacing people in any of these current roles should they move outside the organization. At the same time, organizations work with current employees that have potential to take on key roles in the future to understand what types of roles fit their skillset and what development is required to help them effectively take on these critical roles in the future. This information is then recorded in the appropriate location.
What is the connection between succession planning and recruitment?
While there are various approaches regarding how to do succession planning, they all tend to take a long-term perspective rather than replacement hiring, which focuses on filling vacancies when they arise. Effective succession planning allows organizations to make better decisions about where to spend money on recruitment. Proactively developing existing talent for key positions in the future can reduce the costs associated with recruiting, selecting, and onboarding external hires. This allows for a more targeted investment in critical roles.
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How often should succession planning be reviewed?
While succession planning is often built into an annual cycle, it should be a continuous process that is kept active through ongoing discussions and attention to employee development. Individuals’ aspirations and motivations can change over time, and organizations who fail to stay close to their talent, as well as the business’ changing needs, do so at their peril.
Should succession planning be confidential?
Succession planning is the most impactful when it is transparent. Understandably, some organizations keep information about succession planning secret for fear of setting unrealistic expectations, as well as causing disappointment in those not identified as successors. However, creating a culture of transparency based on open and constructive feedback is the best way to engage employees and help them understand expectations and where to focus their development. Organizations that encourage honest, two-way conversations create an environment based on trust that enables everyone to thrive and strive to perform even better.
It is important to be transparent about the needs and nuances of the succession planning process. Communicate clearly and commit to objective evaluations of candidate performance, values, and core competencies. Ensure that the needs of the role, the company, and the potential successor are met and that all parties are ready to tackle the next chapter with a growth mindset.
How to create an effective succession plan
(H2) How to create an effective succession plan
An effective succession planning strategy is a long-term undertaking. Leaders must commit to the process, envisioning future resources, organizational, and financial needs. Because corporate succession planning is a long process, it is important to prioritize structure, measurable outcomes, realistic standards, and clear communication to guarantee the most effective and efficient outcomes.
The phases of succession planning
While there are many succession planning steps, the overall process can be broken up into four broad phases.
- Phase 1: Succession planning starts by identifying critical roles that would benefit from being filled by an internal candidate and getting senior leaders to participate in the development of emerging talent. Talent development is foundational because it broadens the pool of strong candidates, offering them experiences and mentorships that sharpen their skills and institutional knowledge. This also acknowledges employees’ abilities and growth potential, making them feel valued and strengthening their commitment to the organization.
- Phase 2: This next phase involves measuring employee achievements and progress against organizational and succession planning goals. This helps identify internal candidates best suited for succession roles, while others continue to grow and thrive in non-succession roles.
- Phase 3: In this phase of the succession planning process, leadership development intensifies for succession candidates. They participate in bigger projects, take on more challenging tasks, and develop deeper professional connections with senior executives.
- Phase 4: The final phase involves selecting a successor based on an evaluation that maps each candidate’s strengths and development areas.
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How should key roles be identified for inclusion in succession planning?
Although it might be tempting to include all positions and roles in business succession planning, it’s not feasible or realistic. Effective succession planning typically focuses solely on the most important roles in an organization, and identifying those that pose the greatest risk to the organization if left unfilled. Here are some questions to help identify which roles should be included in succession planning:
- Are the decisions made by the person in this role significant to the company?
- Is this a leadership role, and does it have direct responsibility for a large team?
- Does this role require specialist knowledge that is hard to replace?
- Is there a high risk if a person in this role leaves to join a competitor?
- Would filling this position be more protracted and costly than most other roles?
- Would it take a significant effort and an elapsed period of time to train a successor for this role?
Can assessments benefit succession planning?
Personality assessments gather data that inform multiple aspects of succession planning, such as understanding both individual and team strengths and gaps, identifying leadership traits, highlighting oversights in current practices that can be corrected with training or restructuring, and more. By zeroing in on potential leaders early, your organization can take a more insightful and nuanced approach to succession planning.
What are some common succession planning mistakes?
Some of the biggest succession planning mistakes organizations can make include not clearly communicating or committing to a vision built on broad leadership development, ignoring the importance of intersectionality and diversity in a talent pool, or failing to adopt a comprehensive, long-term succession strategy with goals defined along the way.
The most impactful mistake is ultimately choosing a successor who is not an ideal fit for the role. To avoid these missteps, dedication to development plans and employee satisfaction, records of commitment and communications, and balancing a focus on key competencies and traits with room for change and agility are all vital for effective succession planning within an organization.
Final candidates for a successor should be well-versed in the expectations of the position for which they are being prepared to take over. More importantly, each person should be excited and inspired by the opportunity and the company’s values and purpose. An enthusiastic and skilled leader garners more support from a workforce in transition.
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