Effective succession planning is a company’s insurance policy for sustainability. This becomes clear when critical positions become vacant. A good succession plan means there’ll always be a talented and properly trained employee who can take over before operations fall into disarray.
Often, the succession planning process is way down a company’s list of priorities. But critical roles are hard to fill. All businesses need to be ready to respond to employee departures, both planned (like retirements) and unexpected (like career changes).
Here is a comprehensive guide to help you build an effective succession plan:
So, what’s succession planning?
Imagine you’re a football coach. Before a big game, one of your most valuable players announces they’re leaving the team. Do you have players sitting on the bench who have the skills, maturity and motivation to take their place? Well, you should. Succession planning ensures that each key role vacancy will be passed on to an appropriate employee.
Key roles may be leadership positions of any ranking, highly specialized roles or important operations positions. Companies can identify internal talent and prepare (in other words “groom”) them to assume key positions, should the need arise. Succession planning isn’t the same as replacement planning because it doesn’t just focus on temporary solutions. It’s a mechanism to counteract turnover and uncertainty, a way for teams to continue operating successfully in the long-term, even when key players leave.
What is a succession planning process?
Get to know the ground rules:
- Identify current and future needs (succession, skills etc.) based on strategic planning and company vision.
- Find critical roles and identify incumbents’ profiles. C-suite and high level directors are always critical roles, but it’s worth looking at lower level roles too. Gather information on when vacancies might occur (e.g. retirement.)
- Plan. Determine who can fill which positions and conduct gap analysis to identify the difference between current skills and those needed in the future. Groom individuals and pay attention to their learning and development.
- Reevaluate. Succession plans shouldn’t be put on the shelf. The process of succession planning is ongoing and needs change. Review your plan periodically to keep it current.
Why do I need succession planning when I can recruit?
Recruitment is always important and it’s worth investing in expertise, efficient processes and technology. However, it’s sometimes better to look internally to fill a position. It can help cut recruitment costs and avoid spending valuable time onboarding. If you promote from within, you’d be filling a critical position with someone who already knows your company’s history, objectives and vision. And it supports retention and enhances employee engagement by demonstrating that you value your employees and want to give them opportunities for advancement.
How can I build an effective succession plan?
Ensure you’ll make the most out of your plan by considering the following tips:
Create a formal process
Especially in small businesses, there’s a tendency to overlook formal processes for succession planning. But a formal process promotes consistency and can be communicated more easily to everyone involved. It’ll support visibility and effectiveness. Don’t aim for a rigid process though. Guidelines can be more useful for people to reference.
Companies use succession plans when incumbents retire, get promoted or pursue new opportunities. Communicating those plans ahead of time can positively impact your employees. Employees (and potential employees) will see you invest in talent. Trust and loyalty will be enhanced. It may also help morale remain high as they won’t have to worry about what’ll happen if a leader leaves.
Plan across all ranks
Succession planning used to be just for executives. But just focusing on executives means you could overlook people in other key positions. It’s important to have more than just a CEO succession planning process. After all, lower level employees are more involved with everyday operations than the C-suite or board of directors.
Build the appropriate training plan
Succession plans don’t work without training plans. People who can fill critical positions now may have outdated skills by the time succession rolls around. Likewise, people who may not be ready to fill certain positions yet might be the best choices after the right training and coaching. The succession planning process flow should be developed alongside training plans. Try to train employees for future roles as well as their current role.
Look for external opportunities
Large businesses have a wide range of internal choices to fill positions. Smaller companies may sometimes need to turn to the outside world to build their positions’ talent pipelines. You can create an external pool of talent by always looking for great candidates. For example, you can interact with key people on social networks to build rapport and then reach out when succession issues arise.
Proactive sourcing gives you a head start on filling positions. Download our free sourcing guide.
Encourage a culture of learning
If employees gain a lot of skills, there’s good chance they’ll be able to advance to critical positions. Succession planning process steps like mentoring, shadowing and job rotation to foster a culture of continuous learning and development.
Think about motivation
Not all employees will agree with your plans to place them in the critical position you have in mind. They may have other plans. Don’t indiscriminately include people in your succession planning. Talk to them about their career goals before critical positions become vacant. Otherwise, you may have to start looking for a successor from scratch in a time crunch.
Create an emergency succession plan
Although you can anticipate and plan for retirement and promotions, people may leave their positions unpredictably. In these cases, replacement plans can help. Replacement plans don’t really need training plans or talent pipelines like succession plans. But it’s important to identify a couple of people that can step in and save the day. Look for people who can act as interims until you find a real successor.