How to do Succession Planning

Ever had that sinking feeling, one of your key executives has just let you and the CEO know they will be leaving? Thing is, they are not only seen as a “true leader” by their division, but  also viewed as essential by your biggest investor for delivering a key objective. Whilst you start the search for a new leader, things might have been easier if you already had a clear succession plan in place.

What is Succession Planning?

Succession planning is the process of identifying and developing employees within the organisation to fill key roles when they become vacant. It’s a proactive approach to ensure there is a pool of skilled individuals ready to step into leadership positions or other critical jobs. The result: minimised disruptions and maintained business continuity.

Why does Succession Planning matter? 

Succession planning is a vital process for any business, its primary purpose is to ensure critical roles are always filled with qualified candidates. Secondly, it implicitly provides development plans for some of your best talent to be able to move into some of these roles. Companies that can develop future leaders effectively safeguard operations against sudden departures and have no trouble keeping the business running smoothly in the face of unexpected changes. If you don’t have succession plans in place, you are at increased risk of:

• Operational inefficiency: Key roles being left vacant can halt progress.
• Loss of institutional knowledge: Valuable experience and know-how can walk out the door with departing employees.
• Increased turnover: Lack of growth opportunities can lead to high employee turnover, as employees may leave in search of better career prospects elsewhere.

How to do Succession Planning?

1. Identify Critical Roles

Identify the key positions that are essential to your company’s operations. These are not just C-level roles but also include specialist technical positions or other strategic roles that would cause disruption if left vacant.

You can easily identify the roles by asking:

• Which roles are crucial for the company's strategic objectives?
• Which positions would be difficult to fill externally?

2. Identify Potential Successors

Look for high-performing employees who exhibit the skills, leadership qualities, and potential to take on larger responsibilities. Remember though that the role you are assessing them for might require a different blend of skills, so double check their suitability.

Key questions to ask are:

• Performance and track record: Has the individual consistently met or exceeded expectations?
• Leadership qualities: Does the individual demonstrate strong leadership skills (decision-making, communication, and team leadership)?
• Growth potential: Does the candidate have the ability to develop further and handle more responsibility?

It’s advisable to involve current leaders in this process, since they can offer further context into employees’ strengths and areas for improvement.

3. Assess Skills and Development Needs

This is the gap analysis stage. Where does an individual need to strengthen their capabilities to be ready to stand in to a more senior position. If you have existing performance reviews, these are a great starting point to understand where development is needed.

Create development plans that include:

• Formal training programs: To build specific skills or knowledge.
• Mentorship opportunities: Pair potential successors with experienced leaders who can guide their development.
• Job rotation: Enable individuals to take on different roles within the company for a fixed period of time to diversify their experiences.

4. Create a Timeline

Succession planning isn’t a one-off event. You need a timeline for when successors should be ready to step into their roles. This depends on both the urgency of the need and the current development level of the candidate.

Key aspects to consider are:

• Immediate vs. long-term needs: Are there any expected retirements, promotions, or transitions coming up in the near future? Who could step into those roles now?
• Development timelines: Set realistic timelines for skills and leadership development to ensure that successors will be prepared when the time comes.

5. Communicate the Plan

Transparency is paramount for a successful succession plan. Communicate with both potential successors and current leaders about the process, expectations, and opportunities.

It doesn’t need to be formal, but informing individuals that they are being considered for leadership roles can boost engagement and motivate them to take ownership of their development.

Simultaneously, share the broader plan to key stakeholders within the company, ensuring that everyone understands the strategy for leadership continuity.

Here it’s important not to make false promises to potential successors of something that has no concrete timeline (e.g. exactly when a senior leader might retire and when they could assume a more senior role). 

6. Monitor Progress and Review the Plan Regularly

Like any change, succession planning requires regular review and adjustment. Monitor the progress of your potential successors, ensuring they are receiving the training and support needed to grow into their future roles.

Regularly review the plan to account for:

• Changes in business needs: As the business grows or changes, new critical roles may emerge, or certain roles may become less important.
• Employee transitions: Employees identified as successors may leave, require more time to develop, or no longer be the right fit for a role.

It’s a good idea to review the plan annually, often after new annual business objectives have been set.

In Summary: Key Benefits of Succession Planning

An effective succession plan offers several key benefits:

• Business continuity: Ensures there’s always someone ready to step into critical roles without significant disruption.
• Employee engagement: Increases employee motivation by showing there are opportunities for growth and advancement within the company.
• Talent retention: Employees who see a clear path for career development are more likely to stay with the company.