How can succession planning be improved? And what happens to an organization when there isn’t a plan in place? Or maybe one that’s no longer relevant? An organization without a pipeline of capable leaders ready to step into key positions is asking for trouble.
The way to improve the succession planning process is to prepare early, collaborate, monitor, and track. When a quality employee leaves a company, it can cause workplace havoc if there’s no immediate replacement. Effective succession planning keeps top talent in your company pipeline ready to quickly fills gaps in your organization and maintain smooth operations.
This article breaks down the steps for successful leadership succession planning. It’s a valuable guide for those who have no planning in place. And it’s also helpful if your company wants to improve on an existing plan. But first, let’s see how having a succession plan is a useful tool forretaining top talent.
Succession Plans Retain Quality Employees
A transparent succession plan can improve employee retention. That’s because your valued staff sees the potential for growth within the organization. Thus, ambitious employees feel compelled to do more, work harder, and prove themselves ready for the next step in their career. The knock-on effect is happier, more productive teams that are likely to stick around.
2017 Employee Survey: 62% of surveyed workers said they would be more engaged working for companies with a clear succession plan.
When Organizational Succession Planning Fails
Succession planning is a critical human resource management process. But there can be workplace havoc if human resources fail to fill gaps left by a promotion.
Another problem is choosing the wrong successor for the position. And the higher up the corporate ladder, the worse things can become if a position is filled by a poor successor. So, your company’s success rests on leadership continuity, stability, and employing the right people.
Other potential risks of a poor or absent succession plan include:
Disruptions to production and workflow because of the above
Increase demands on existing employees (see below)
A staff vacancy often leaves the remaining talent to reluctantly take on extra work that can lead to burnout and a fall in productivity. Especially if organizational leadership see the gaps being covered and put filling the critical role lower on their priorities. And suppose the gap left by a promotion remains vacant for the long term. In that case, others in the organization may also decide to walk.
When the Succession Planning Process Succeeds
Successful succession planning is the meticulous process of recognizing high-potential talent. To prepare them for future advancement, you constantly evaluate performance and help develop skills. Effective planning should prepare your organization for both expected and unexpected absences. Succession planning is invaluable for any company at any size, including small and mid-size organizations with few resources.
Deloitte survey: Around 86% of business leaders think replacement planning is a top company priority, while only 13% think they do a good job.
Below is a 5-point foundation plan to developing a successful succession strategy.
1. Identify Critical Positions within the Company
Succession planning is about lining up career successors, but first you need to identify the critical positions within the company that need a plan in place. Many businesses focus only on top-level posts, and potential replacement candidates, especially male replacements. This is a common mistake as it cuts your pool of potential candidates by half.
Often great female candidates for the leadership pipeline are overlooked because they lack specific leadership skills or business acumen. Instead, companies should be looking at these high-quality candidates as an opportunity to improve them with formal leadership development efforts.
EWF International is committed to improving gender parity in business roles and leadership at all organizational levels. Our Emerging Leaders program prepares early- to mid-career women to take on leadership roles by building their business acumen, leadership skills, and widening their perception to be more effective leaders.
The first step of your plan is to recognize the essential roles within your organization. In this case, that means the most critical and urgent leadership positions. For help, look to the bullet points above and consider what positions in your organization, if suddenly vacant, would threaten your organization’s ability to operate. The next step is to arrange those roles in order of urgency to be filled.
Remember to take note of the gaps a promotion would create and how it would affect day-to-day operations. This data is invaluable as it shows where you need to focus future recruiting efforts.
2. Nominate Potential Successors
This step is vital and should not be hurried as you evaluate each candidate’s potential. Successors don’t necessarily need to be those next in the organizational chart. Instead, cast the net a little wider to see what other promising talent there is. You may find ambitious team players with the exact skills and character the position needs further afield.
Put a Task Force Together
More heads are better than one, so determining potential successors should be a team effort to avoid blindspots. That can include other leaders, peers, and senior managers suitable for the task. The simplest way to start the process is to give your team a quick questionnaire.
The Nomination Questionnaire
A succession nomination evaluation lists desirable attributes applicable to the post. Ask your team to respond to specific candidate qualities like:
How confident are you in this candidate’s ability for the position?
Strategic and critical thinking?
Proactive & responsive?
A 5-star rating setup or survey type approach works well.
The latter might look something like this:
How confident are you in this candidate’s ability for the post?
Add a comments box at the end of your survey to gather extra data that isn’t represented in your questions. This time-saving approach is an excellent way to narrow down potential candidates and discover important details on each candidate.
Contact Potential Successors
Once you have your shortlist of candidates, ask if they’re interested in the future role. If not, then you haven’t wasted time digging deeper into their profiles. Once you have your shortlist, consider if the candidates will need training and in what areas. What leadership development resources are available to these candidates?
3. Assess Training and Development Needs
You likely will not discover a perfect successor, but you should find a perfect candidate. People who may lack some skills but have the ability to learn them and quickly become competent in the role. By identifying weaknesses and strengths, you can form and implement a personal development plan. This identification is necessary to bridge any gaps in skills and experience.
Three effective ways to achieve this are:
Job rotation to develop new skills, experience, and knowledge
Shouldering various tasks during manager vacations or other leave
Mentoring to increase knowledge and skills
Development plans must be customized for individual candidates. This critical step helps prepare them for future roles within the company.
ATD Research 2018: Most organizations have no plan in place to fill gaps in leadership roles. Only 35% of US businesses say they have formal, updated succession plans.
4. Measure Succession Candidate Progress
It would be a mistake to assume you’ve covered everything in the first three steps. Monitoring and sharing a candidate’s progress with your team is a vital phase of the process. Not only does this keep you updated on the individual, but it also highlights what’s right with your planning and any newly discovered flaws.
If candidate development is lacking—but you still have confidence in their abilities—it’s time to rethink the strategy. Other opportunities for successor growth may include:
Additional training or learning aligned with the successor position
Professional development coaching
Work on special projects
Other ways to stretch skills and learning in aligned areas
You also need to measure the plan and make changes where necessary.
5. Metrics to Measure the Succession Plan
The metrics below are ideal for tracking the effectiveness of succession plans. What you measure depends on your company goals, of course. The six commonly reviewed metrics here are a good start:
Retention of leadership talent (your succession candidates)
Percentage of positions filled internally
Percentage of places filled externally
The time taken to fill senior vacancies
If your planning falls short, you will need to look deeper at other metrics. Examples of areas to assess are overall satisfaction levels among the leadership, workplace morale, and overall organizational engagement. One way to build a picture is to create a survey like the example in step 2 above.
Forbes, 2018: Around 93% of employees surveyed said they would remain in their jobs longer with organizations that invest in their careers.
Review and Revise
The world and its workplace, cultures, and systems are forever changing. A succession plan that worked some years back may no longer be relevant or practical today. Thus, your dynamic goals need periodic monitoring and review.
Remember, these are long-term strategies, and you don’t want to fall short when it’s time to replace important leadership roles.
When to Revise and Review?
How often you review and revise an in-place succession plan depends on several factors. Larger businesses need more frequent attention because they have more operational changes and talent moving through the ranks.
Aim to revisit the plan at least every 6-12 months, whatever the size of your company. And always review it when a succession occurs or new talent joins the organization’s management. That’s the time to reassess your candidate shortlist and nominate others. Also, periodically measure the progress and readiness of individuals undergoing professional development.
Is Your Plan Current?
Check to see if the last update is still workable with current conditions. If not, the succession team must adjust the plan to meet present needs and goals. Remember, this is a dynamic process, so you may need to update if your organization faces unforeseen challenges.
The Tracking Team
HR is typically responsible for developing and implementing succession plan strategies. It then tracks talent development metrics while suggesting updates and adjustments to the company CEO, COO, and other senior leaders.
If this is your first succession plan, consider creating a blueprint with your team. This method is great for brainstorming various scenarios, both predicted and unanticipated. Think about how you would cope in the event of an emergency transition. Who could step in temporarily to fill those leadership duties? You get the idea.
As the American polymath Benjamin Franklin once said, “If You Fail to Plan, You Are Planning to Fail.”
The way to protect your company against talent gaps and workplace disruption is to formalize the process. Put together a team of leaders and HR, defining each role. Consider calendar management with regular reminders to accomplish steps, along with review and revision dates. This way, no part of your planning gets neglected or forgotten.