It still amazes me when talking to senior management of multinational businesses that they do not have a comprehensive succession plan in place for their key roles.
It this age, where going to market to find the perfect skill-set and culture fit for your business, is a lengthy, expensive and often exhaustive process; this has never been more important.
What is succession planning?
Succession planning is a process for identifying and developing internal people with the potential to fill key business leadership positions in the company. Succession planning increases the availability of experienced and capable employees that are prepared to assume these roles as they become available, whether it is through death, retirement, resignation or even unforeseen circumstances resulting in removal from that post, you need to ensure that you have a plan in place.
Why is it important?
- Succession planning benefits the business in the short and long term.
As a business that understands its own needs in the long term, you will be able to benefit in the short term. For example, by identifying the future leaders within your organisation, you will be able to plan for the types of training necessary, and who should benefit from it. This will allow you to spend resources where they are needed, rather than simply hoping for the best.
- Planning for the unplanned.
Anything could happen at any time. Your CEO could become ill. He or she could retire suddenly. Your CFO might decide to go elsewhere. Senior managers might have a nervous breakdown. There is no accounting for the future of any of your staff, and being aware of that means being able to plan for it carefully. Having a succession plan for key (and future key) players within your organisation means that you won’t be caught with your pants down when they time comes, whether that time is unexpected or long in the pipe line.
- Gives employees a sense of something to work towards
If employees know where the company is going and that the company is prepared for the future, it is less likely to be a shock to them when things change. Slowly getting them used to the idea that things will not stay the same forever means they are mentally prepared for any eventualities. It also gives a sense of something to work towards – if hardworking employees know their career paths have some sort of track that the company is invested in within the organisation, they are more likely to stay.
- Gives a big picture overview of the future of the company
If your organisation is progressive, it is possible to identify not only heavyweights who may need succession plans, but also those further down the organisational structure. The people who keep the business going may also need to be part of the planning of the future of the company, and making all levels of management part of this process will allow each individual an overview of what is needed and expected from them. So line managers can begin prepping their employees to take over their role, as they move forward within the company.
- Keeps investors happy
A sudden departure of a key player within your organisation can cause stocks to be more volatile. If stakeholders, investors and the public are aware that there is a succession plan and that there is a plan for the future of the organisation, there is less likely to be sudden panic about the future of the company.
How to go about it succession planning?
- Have a comprehensive strategy.
This entails ongoing preparation, evaluation and assessment of candidates throughout the organisation. This can come from various sources, including compiling and evaluating performance reviews over a period of time, understanding career aspirations of various individuals, and understanding development plans of the company.
- Assess key positions.
The first step in having a comprehensive strategy is to assess what the key positions are within the organisation as this will give you a good starting point for identifying which positions will need filling. Positions need to be evaluated based on a number of factors, including identifying high-risk positions, high-impact roles, impact on business retention and impact on the business. An important part of this step is to extract from the incumbent what their role entails, but then also to map out what the potential areas for improvement or innovation are in those areas, in order to get the best from the role.
- Identify and Prepare talent.
Another important part in your strategy is to identify which of the candidates is actually going to fulfil the various roles that may need to be fulfilled within the organisation. This is more than just about assessing capability, though this is important as well. You need to understand each person’s career path, their history within the organisation, desire to move in that direction and skill sets. The idea is to identify their short term needs and long term career path and skills needs.
- Monitor and review this talent.
Constantly reviewing talent to ensure they are still the right fit, are still wanting to pursue that career path and are capable of doing the job required is paramount. This will help keep the succession pipeline full and on track. If this changes, it gives the organisation time to make the necessary plans to ensure you are able to start the process again.
- Foster a culture of succession.
This means identifying that there are a number of positions that will need succession plans, outlining this to employees, ensuring you have their buy in, detailing what is expected of them and how succession planning works, and ensuring that each employee in the process feels that they are being heard and have a path that they are following and a goal towards which they are working. If each employee is part of the succession planning culture, they can then help identify and groom other employees in that same way.
If you have a large team of manage a large business, it is imperative you review the current talent in your ranks for future leadership roles. If you don’t you may just see one of your star employees leading your competitors in years to come.