Succession planning is a strategy for identifying and developing future leaders at your company — at all levels. It is not about replacing an existing employee. The purpose is to prepare the organisation and develop its “bench strength” for future organisational requirements
Succession plans are used to address the inevitable changes that occur when employees leave key positions, for whatever reason. They make sure the business is prepared for all contingencies by identifying and training high-potential workers for advancement into key roles.
Through your succession planning process, you help retain superior employees because they appreciate the time, attention, and development that you are investing in them. Employees are motivated and engaged when they can see a career path for their continued growth and development.
Succession Planning is important because at the heart of the Talent Management Process, is identifying key roles and mapping out ways to ensure the organisation has the right people with the right skills, capabilities, and experiences, in the right place at the right time.
The labor market is tight, and it’s an employee’s market. There is a shortage of top talent available, therefore finding talent for leadership roles at your organisation will be no easy feat, but a must, in helping to ensure business continuity.
Executive search is expensive. Having the foresight to develop the top talent you currently have, alongside actively recruiting top talent, and making sure they have the proper experiences to prepare them for the future, is an important strategy. The complexity involved at the most senior leadership levels is significant. Preparing top talent to take on these roles and challenges is essential to organisational success.
Theory v Practice
It all sounds logical and obvious. The end result is a well-oiled machine with a multitude of favourable outcomes, for business continuity.
Surely every company has a strategy in place to make sure there are no business interruptions in this regard. Really?
Leadership positions at all levels can become vacant at any time, without prior notice. Often, staff are reluctant to reveal their prior intentions to Employers, in case they are not successful in their application for another job, and there are any residual sensitivities if they remain. The outcome is that often, the first time an Employer becomes aware, is when a reference request is received.
By then it is too late, and the scramble is on. What should be a manageable event, has the potential to turn into a major organisational crisis.
Succession planning is one of those “management” concepts that we all feel obliged to acknowledge as necessary good practice, but few in fact, do anything meaningful about… until we have to.
That is just the reality of how Organisations are managed. Succession planning is often a reactive rather than a proactive exercise.
We are spurred into action when we suddenly become aware that a senior company position is about to become vacant, due to the post holder, retiring, leaving, getting fired or dying. The race is then on to find a replacement.
In an ideal scenario, the replacement would already be identified and ready to slot in at the appropriate juncture. How often though, is that really the case?
Could your workers answer the question, “What is the succession plan at your company?”
They could, if you’ve built one and shared it.
Effective succession planning, or talent pool management, concerns itself with building a series of feeder groups up and down the entire leadership pipeline of the company. Progression arrangements are put in place for all leadership positions, from first line management, through middle line, and onwards to senior level positions.
This is in contrast to “replacement planning” which is focussed more narrowly on identifying specific back-up candidates, for given senior management positions.
Thought should be given to the retention of key employees and the consequences that the departure of key employees may have on the business. This concept applies equally across the whole company profile.
Advantages to Employees
Employees who know that the next role awaits them has advantages of enhancing their efficacy and value as an employee. Knowing the Organisation’s plans for their next opportunity, –and that there is one-, reinforces their desire for career opportunities and development.
For Managers and Employers, it’s a proactive measure that gives them an alignment of talent development with the company’s future leadership needs. This is one of the areas that employees’ value most from their employers.
Relevant skills can be identified, along with development opportunities necessary to help employees become prepared for progression, when the next job opportunity turns up.
The employee benefits from the ability to work with their Manager or Supervisor to make sure that s/he has a career plan that moves them in the direction of their next opportunity. The Manager is key to an employee’s ability to get the experience and education needed for career progression. The employee’s value is shared with the rest of the organisation so that if an opportunity comes up, the managers can consider the employee to fill the role.
Advantages to Employers
The importance of insurance is self-evident. The problem with not having insurance in place, is that untoward events happen fast. Without the right protections we are exposed and vulnerable, whatever the context of the disaster, ie house, car, travel etc.
We cannot plan for disasters, but we can plan what to do should a disaster strike.
Organisations insure themselves against against business interruption for fire, flood, major power failures, security breaches, use of CC TV etc but all too often, fail to safeguard their most important asset…. their talent pools.
A Company may not get a second chance if it fails to adapt quickly, after a key player leaves the company. Exposure to unnecessary risk is not a good strategy
Succession planning disaster-proofs the business by:
- Minimising the potential for gaps in your team
- Ensuring continuity of staffing
- Avoiding transition shortcomings, when employees are promoted
- Ensuring on-going availability of leadership talent
- Increasing assurance of choosing the best person for the position, rather than the best available person
- Avoiding the inherent risks associated with hiring new talent. Companies generally have better information about internal candidates than external ones.
- Attracting quality candidates
- Retaining top performers
- Motivating existing employees
Who Needs Succession Planning?
All organisations, no matter their size, need succession planning. While it is less likely that you will have potential successors for every role in a ten-person company, you can minimally cross-train.
Cross-training ensures that employees are prepared to babysit the key job when the employee resigns. This keeps responsibilities from falling through the cracks. This will keep the mission on track if a key employee leaves. It’s not as effective as having a fully trained employee, but that is not always possible for every role.
The most important starting point is to be proactive.
It can take time to find and prepare promising candidates for leadership roles, whatever the size of your Organisation. As such, no time should be lost in developing a company-wide strategy for talent spotting. Ideally this should be multidimensional, flexible, and dynamic.
Components of a succession planning strategy include:
Identifying key positions for which a succession plan is necessary.
The organisation may have a couple of key positions or it may have many. The Chief Executive Officer role is definitely one to be included in the succession plan. When deciding which others to include, consider:
Is this a key role critical to the success of the organisation, and if the person in this role suddenly leaves or is unavailable and the position becomes vacant is the organisation at risk?
Identifying the successor or successors
Identifying the successor or successors
The organisation may have more than one employee who has demonstrated the knowledge, skills, potential, and the interest to develop to a level of additional responsibility. The commitment to the process, and abilities, of the succession candidate are integral to identifying who to develop.
A word of caution when reviewing when possible. candidates for promotion. Be mindful of the difference between performance, and potential.
People do not get promoted for doing their job well. They get promoted by demonstrating their potential to do much more.
If someone is a standout performer in their current position, and does their job extremely well, it does not automatically follow that they are a suitable candidate for promotion to a higher level.
People rise to their “level of incompetence”, ie an employee is promoted, based on their success in previous jobs, until they reach a level at which they are no longer competent, as skills in one job do not necessarily translate to another. This is known as the “Peter principle” (management concept developed by Laurence J Peter).
The result is that people get promoted beyond their level of competence, performance and effectiveness taper off, and they are then perceived as a “failure”.
They then become stuck, and cannot get back. Both the Employee and the Organisation suffer as a result. The level of Organisational risk rises the more senior the appointment.
Identifying job requirements
The task is to understand what requirements will exist within one or more key positions in the future. This creates an inventory of skills and attributes that will serve as a checklist to audit what a succession candidate presently offers and needs to develop.
The succession planning process must look at building the competencies and skills for current and future organisational needs. It has been correctly observed that succession planning is about “what is next?” not just “who is next?” There will be one set of competencies (i.e., knowledge, skills, and abilities) for each position. However, in creating a development plan to build the competencies of succession candidates to be ready for the intended future role, there will be different development plans for each succession candidate.
As the “father of modern management”, Peter F. Drucker, observed “what gets measured gets done.” It is essential that your Organisation creates a succession plan, and invests in the development of employees, and assesses its progress on an ongoing basis towards the intended outcome. Annual review is really not a viable option.
Who is responsible for planning?
Organisational leaders who are involved in succession planning range from the Board of Directors, the CEO and, through delegation, all other employees who manage staff.
Every person in the Company, who has a position of authority should be involved in developing the Succession Planning Strategy.
There are distinct advantages to this approach:
- Key staff have an understanding of the structure and underpinning philosophy of the Plan
- Key staff have ownership for the plan, and are therefore more motivated to make it happen, because they will feel it is their If its to be… its me.
- Key staff will make the vision known throughout the Company.
- Staff will feel more valued and involved in planning the continuity of the Company, and indeed their own Career prospects.
- Staff morale will be boosted, performance enhanced, and staff retention increased.
- Staff will feel empowered to implement, and review the Plan on a continuous basis.
Be inventive.....Do a trial run of your Succession Plan
As part of the implementation and review process, staff could introduce trial runs of the Plan
A vacation is a great time to have a potential successor step in to assume some responsibilities. The employee will gain experience while you learn how prepared the person is to take on a bigger role.
Be bold. Make the effort. Don’t wait until it’s too late and live with regret. The Company at the top of the mountain, didn’t fall there!