What Is Succession Planning?
Succession planning is the deliberate, ongoing and proactive approach that works on identifying and developing internal talent so that they can fill key roles effectively. Although primarily serving companies, the business succession planning is a people-first process. Recognising your employees’ potential for talent development puts your company and future leaders on a fast track to success. Because, at the end, the succession process is all about future-proofing your company.
The succession planning goal is to ensure continuity and to build on the company’s know-how, while nurturing the next generation of key leaders. But it is a process not meant only for C-suite leadership roles. Forward-thinking talent management structures plan ahead and extend their succession planning framework to include technical experts, project leads, and any other role requiring specialised knowledge and leadership abilities.
Key Components of a Succession Plan
A well-executed succession planning process should possess more than a list of potential replacements. It should include qualities to identify critical positions, assess and develop top talent, and create a leadership pipeline representing your unique culture and goals.
Identifying Critical Roles
First step: Pinpoint the critical positions for your business. The challenge here is that they are not always so apparent as they seem. And even if they are now, it doesn’t mean the same rule will apply to your company’s future roles. We discuss positions requiring technical competencies, client relationship knowledge, or operational proficiency.
Map your company’s structure and ask your leadership:
- Which business-critical positions, if left vacant, would put the company’s future growth at stake?
- Who holds all the answers in hand?
- Who are the “go-to” people, your key employees, whom others rely on?
And then go further and ask these questions department-wise. This way, you will lay the foundations for a well-targeted succession planning strategy.
Talent Assessment and Development
Second step: Assess your internal talent pool, based on the previously identified key positions. Yes, almost all companies do performance reviews, but go further: involve a holistic evaluation of skills, leadership potential, and most importantly, readiness for progression and career development. This means it’s not about recognising who is ready now, but who could be ready in the future, provided by the proper support from the executive leadership.
This guides us to the next important question: Could you and your company allow investing your time and effort in current employees to fill key positions in the future? This involves mentoring, coaching, and formal training, designed to close skill gaps and prepare potential successors to step up when needed.
Creating a Leadership Pipeline
Third step: Instead of a single “heir”, build a talent pipeline including multiple previously identified successors at various leadership-readiness stages. This approach has several advantages. It creates a culture of risk mitigation, reducing the chances of failure, while at the same time doubling or tripling the chances of bringing up potential leaders in place of the current post holders.
Rather than competing for a single “throne”, the leadership pipeline allows ambitious employees to contend for multiple positions, even ones that do not yet exist. This step signals employees that progression is possible, boosting healthy competition, engagement and higher retention rates.
Steps to Implement a Succession Plan
The company’s future development requires effective succession planning processes that provide ongoing proactive steps:
- Establish clear objectives
- Evaluate and develop internal talent
- Monitor, review, and update the plan
- Align with organisational goals
Establish Clear Objectives
Clarity in this first step will bring efficiency and results in all the other steps. It starts with your current senior leaders. Is your company satisfied with their performance, and are they the role model upon which you will build the future leaders? Or will you go with a strategy for replacement planning? This also applies to all the leadership roles, including the line managers. Maybe you would like growth-oriented leadership potential, or someone who would drive a cultural change?
Establishing clear objectives provides a benchmark for quality business succession planning and sets the direction for future talent development. That is why starting the succession process on the right track is of your utmost interest.
Evaluate and Develop Internal Talent
After the goals are set, your attention should switch to the potential talent inside your company. And when we talk about potential, it’s not meant only for technical abilities, but also soft skills like adaptability, emotional intelligence, and most importantly: willingness to learn. You can understand these traits by using a combination of skills assessments, performance data, and managers’ feedback.
Remember to include all the managers in this succession planning mission – everyone should be aware of the importance of the succession planning process.
Monitor, Review, and Update the Plan
In the modern business world, things change fast. What was once considered a clear direction could no longer serve the new plans. The same applies to succession planning. Your critical positions could be subject to modification and change once you review your new company plan. Adapting and aligning your current company’s goals and market realities is crucial. This means regularly tracking the progress of your already identified successors, updating their development programs and, most importantly, being prepared to pivot if circumstances change.
Alignment with Organisational Goals
A succession plan should always follow your broader business strategy closely. Here’s an example: imagine your company is expanding into new markets. As an answer, you will need to prioritise people with a global mindset and cross-cultural experience. Or imagine your company is on the brink of a new, innovative discovery. Your succession planning should then shift its focus to creative problem-solvers and risk-takers.
Benefits of Effective Succession Planning
We’ve already mentioned a lot of benefits that succession planning brings to the table. But let’s dive deeper into the top 3:
- Improved employee retention
- Increased organisational agility
- Better risk management
Improved Employee Retention
It’s clear as it can be: employees could see their career paths set for progression if proper, proactive succession planning occurs around them regularly. Simply put: action drives retention.
They are far more likely to stay engaged and committed, especially the ones with leadership potential. This way, they see the company as their partner, one who invests their time and efforts into their development – an action that develops a strong sense of loyalty.
Increased Organisational Agility
Nurturing a culture of succession planning increases your company’s agility by always having top talent ready to step into key roles whenever needed. This way, you are better equipped to handle change, like sudden resignation, a merger, or launching a new brand or product line. For comparison, companies working without a succession planning process may take time to recruit and hire leadership roles and then onboard and adapt them. At the same time, you maintain momentum and minimise disruption, resulting in a competitive advantage.
Better Risk Management
Better succession planning leads to better risk management. Because even vacancies and undelayed business trips in key positions could result in devastating consequences, especially in small businesses, damaging client relationships, delaying projects, and lowering other employees’ morale. All this could be mitigated if only your company had a best practice of dedicating a successive replacement to each senior leader.
Conclusion
The importance of succession planning and its impact on the business is enormous. Companies all over the world, from SMEs to national brands, are beginning to implement it more vigorously, as a tool for future-proofing their progress, while nurturing talent and building a culture where people can thrive.
Olive Recruit is here to guide you in creating your succession planning strategies and unlock the full potential of your team. If the proper talent is still not there, our recruitment services will help you provide A-players according to your bespoke needs.
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