Succession Planning: A Future Proofing Tool (That You Are Likely Not Using)

One thing leaders can learn from the hit HBO show “Succession” is that the failure to have and implement a succession plan can create a crisis situation that can eventually become a full-blown disaster. Even if this sounds a bit exaggerated, there is no denying the fact that the lack of a clear succession plan can lead to instability and can disrupt organizational performance.

Succession Planning is both a process and a program. It is the process of identifying, developing, and placing the right talent in critical roles to ensure the continued performance of an organization. An effective Succession Planning program enables organizations to:

ADAPT

As the old saying goes, “If you fail to plan, you plan to fail.” Succession planning helps organizations keep up with changing business needs. If, for example, a key talent suddenly leaves, any business would have to deal with continuity challenges. Succession planning can ensure that an organization always has the right people ready to take over, and can enable them (as well as the business) to adapt immediately.

IDENTIFY

What positions do we need to plan for? Who is ready to take over the key position now? Who would be ready in a few years? A well-designed succession plan identifies 1) positions most critical to the performance of a company, 2) internal candidates with the right competencies to assume those critical positions, and 3) any competency gaps that need to be addressed to begin preparing these candidates for their future role.

ENGAGE

Internal mobility – or creating pathways and opportunities for your current employees to move laterally or vertically within the organization, even across functions – has emerged as a key focus for talent leaders. The LinkedIn 2022 Workplace Learning Report found companies that excel at internal mobility can retain employees for an average of 5.4 years. That’s nearly 2x as long as companies that struggle with it, where the average retention span is 2.9 years. Having a Succession Plan is an employee engagement goldmine because it facilitates internal mobility – it shows your people that they have opportunities for growth within the company and helps them identify the various career paths that they can take with you.

PRESERVE

People in key positions often possess a complex body of knowledge (e.g. subject matter expertise, existing professional relationships, contextual understanding), much of which is intuitive and difficult to replace quickly. When they leave or retire, this knowledge and experience leave along with them. Having a succession plan helps you prepare for, preserve, and transfer this. Some effective ways to pass down institutional knowledge include mentorship, job shadowing, cross-training, guided experience, and acting positions.

INNOVATE

Having a succession plan in place communicates to potential successors that their leaders are committed to developing them. This fosters trust, mutual respect, and psychological safety. In this type of culture, people understand that their ideas are valued and that it is safe to step up – such an environment allows organizations to make better use of existing, and often untapped, ideas for innovation.

It goes without saying that Succession planning significantly impacts businesses, especially during uncertain times. Despite this, there are still quite a number of business owners and leaders who put succession planning on the back burner. According to this study by the Society for Human Resource Management, only 21% of HR professionals said their organization had a formal succession plan in place, and a further 24% had an informal plan. The most common reasons cited for not having a succession plan in place were 1) lack of time and resources, 2) the organization is too small to have one, and 3) the organization is family-owned and operated.

Self Check:

In your organization, do you have a plan on how to mitigate risks for sudden changes in leadership?
In your organization, do you have a fair and objective process to select and develop the best leaders?
In your organization, do you have a process and a program in place to help you nurture your most promising talent and provide them with clear career paths?

Unfortunately, many business owners answer “no,” “maybe,” or “yes, but…” to the questions above. They often don’t think about succession planning until someone in a key position suddenly leaves – putting them in a crisis situation that often leads to rash decision-making. There is no better time than now to take a proactive approach to building your leadership bench and start planning for the unforeseeable future.

Our Strategists from Firesprings Consulting can provide a clear, concise, customized method and framework to designing your Succession Planning program. We take the time to help you:

Clearly articulate your Succession Planning program goals and metrics,
Map out a process that provides a holistic view of succession,
Create and simulate customized tools and templates to be used in the process,
Identify various successor development opportunities within your organization, and
Strategize the best way to communicate your succession planning program.