To effectively undertake a succession planning initiative at your organization, you must first identify your company’s long-term goals. Often companies know what they would “like” to see happen over the next three to five years, but don’t necessarily know how to put their ideas into practice.
As a company grows and its business strategy evolves, its leadership needs can change significantly. To meet these needs, companies must adjust their talent recruitment and development practices. When organizations meet these requirements, they create a leadership and management capacity that delivers sustainable business results. This leads to standardization in performance requirements for key roles, minimal attrition among top performers, and enhanced promotion or hiring from within the organization.
Evaluating your organization’s current and future critical talent requires the use of workforce modeling and scenario planning to identify potential skills gaps and talent shortages in your workforce. This can be more easily accomplished through the use of technology, coupled with the creation of a clear succession plan with defined goals.
Companies that create an effective succession management process should be able to:
- quickly anticipate succession gaps,
- identify employees with high management potential and actively plan their careers and development to build bench strength, and
- align their people strategy with their business strategy.
A comprehensive company succession plan should consider the following:
- Executive Buy-in. Leadership development must be a priority for company executives if a succession plan is going to work. As with any company strategy, engaging company executives to help establish goals will help build support for succession planning.
- Goals and Objectives. Planning to develop a strategy and actually developing a strategy for determining the key roles that will need to be replaced in the future and are two different things. Establishing goals and tracking their progress are key to a succession planning initiative.
- Decision-making Tools. Create realistic development expectations. Only give the promise of succession if there is a realistic chance of it happening. When management is engaged in succession planning, an organizational chart (org chart) can be a very useful tool for highlighting and selecting suitable successors for upper management positions. An org chart can include relevant skills, anticipated retirement dates, and other pertinent information useful for the succession planning process. Software solutions are available to automate the succession planning process (see listing of vendors and solutions at the end of this article).
Here are four steps your company can take to succeed at its succession planning initiative.
Step 1—Recruiting Top Talent: Identifying and Selecting
As an organization, if you’re committed to finding the top talent, then you will. To this end, you need to start recruiting candidates (whether from within or outside of the organization) with skill sets that you plan to develop for key positions. If your talent pipeline is full of potential successors (based on their competencies, experience, etc.), the likelihood of finding the right candidate to fill that position will be that much higher.
Identifying those employees with the potential to assume more responsibility in your organization is the first step in finding the best successor to your key positions.
How do you go about creating a talent pool? All individuals within a company are instrumental in this process:
- Employees can identify positions and career paths they are interested in and work with their managers to create a development plan for the new role.
- Managers can identify top performers within their teams with the potential to move into new leadership positions.
- Companies can use an employee database that includes job positions, skills requirements, and a sorting, ranking, and reporting function to identify and select the most qualified employees.
Once you have identified and selected those individuals, you should determine a logical progression path for each target position. This starts with asking critical questions about the potential successor and determining his or her capability gaps—e.g., “What are the potential successor’s own career aspirations?” A particular individual may be a great choice for a replacement, but you need to determine whether this opportunity is something the individual sees in his or her career plans?
Step 2—Training: Developing Knowledge and Skills
It is important to identify and understand the training and developmental needs of your employees. Identify the core skills and competencies that your potential successor will need for advancement within the company. Create or increase your training and cross-training programs to ensure key employees are receiving the proper training and developing the right skills.
Companies that are successful in succession planning are those that hold their managers accountable for talent outcomes. Managers play an integral role in properly developing the capabilities and skills of their team. The human resources (HR) department needs to also be involved in this process in order to help properly develop and execute the promotion of the organization’s talent.
Key employees need to have a clear view of their career paths and the roles they are being developed to fulfill. This will lead to increased employee engagement, as they’ll appreciate the time, attention, and development that you are investing in them. They will also be more motivated, as they will have a clear career path for their continued growth and development within the company.
Step 3—Transitioning: Planning a Seamless Move
While a seamless leadership succession is the ideal, executive leadership changes are often unplanned and are associated with high risk. Those risks may include a loss of organizational momentum, a decrease in overall morale, a loss of staff, a loss of employee trust and loyalty, and a loss of goodwill among stakeholders. On the other hand, a properly-communicated (and executed) succession plan will help ensure that the transition to the next senior position—whether the prior individual’s departure was planned or not—will be as seamless as possible.
Leadership transition planning is a lot like estate planning. While we certainly don't enjoy planning for after we’re gone, such planning provides the organization with assurance on the sequence of events following a planned (retirement) or unexpected departure (accident, illness, or involuntary termination).
As such, it is important to begin planning for these executive transitions early (i.e., way before they occur)—by establishing a leadership transition plan as part of your succession plan. A good transition plan focuses both on who will serve next in the leadership role and the process for dealing with both planned and unplanned leadership departures.
Step 4—Succession Planning Tools: Using Technology to Manage It All
Succession planning has evolved over the last few years and is a prominent part of human capital management (HCM). Today, more companies are creating succession plans for their entire workforce, embedding it into their corporate strategy. Most companies, however, do not have a fully automated integrated succession planning process and are often still using a paper-based trail. Those that have embraced technology and have integrated talent management software (with succession planning modules) with other HCM-related solutions will be a good position to fill key positions and maintain the growth of their company.
Below are five of the many vendors and their solutions available on the market for managing and successfully executing your succession planning strategy.
If you’d like to evaluate talent management solutions with succession planning capabilities for free, click here.
The Bottom Line
Without involvement from key people within the organization and inclusion of technology as part of your overall strategy, your succession planning efforts may be futile. These considerations, along with the proper development and training of employees with high potential for key and challenging positions, are critical requirements in making your succession planning a success.
Resources for Succession Planning
Society for Human Resource Management (SHRM)
AARP Workforce Assessment Tool