What is Succession Planning and Why is it Important to Organizations?
Succession planning is a way of ensuring that your business stays on track by analyzing the backbone of your venture i.e. your employees. Some of the many benefits of succession planning is that it lets ambitious, less-experienced internal candidates know their hard work and skills have been noticed and appreciated enough to be considered for advancement.
It can be an incredible retention tool and motivator for junior managers and subject matter experts who want to advance their careers into management.
In this article we will talk about the meaning of succession management, its benefits and the process of formulating an effective succession management plan.
What is Succession Planning?
Succession planning is a strategy for passing on leadership roles—often the ownership of a company—to an employee or group of employees. Also known as “replacement planning,” it ensures that businesses continue to run smoothly after a company’s most important people move on to new opportunities, retire, or pass away.
Succession planning involves cross-training employees so that they develop skills, company knowledge, and a holistic understanding of the company.
Why is it Important to Organizations?
The purpose of succession planning is to make sure a company always has the right leaders in place should a change happen quickly. By failing to create an orderly plan for succession, your company may not get a second chance if it doesn’t adapt immediately after a key player leaves the company or passes away.
After all, you can’t anticipate when a serious illness, accident, disaster or pandemic will strike, but you can prepare for what will need to be addressed should one happen.
The Benefits of Succession Planning
Disaster-proofs your business
You buy insurance to protect the company from hurricanes, floods and fires. You install security systems to defend the company from theft. And you back up data to an off-site location to safeguard your business’s proprietary information.
Many business owners get so busy with the day-to-day operations of their company that they fail to make succession planning a priority. These leaders may think they’re too young to be hit with a serious illness. Or they forget that a key player (or several) could be lured away by another company that needs their skills and is willing to pay top dollar for them. Any of these scenarios can leave a business uniquely vulnerable.
Creates structure for training and development
Some of the employee’s professional development may come in the form of coaching, mentoring, job shadowing or a gradual increase in more advanced responsibilities. Other positions may even require the candidate to go back to school to get additional education or professional certification.
By tapping potential successors early, you give employees time to acquire the skills and experience they’ll need to perform well in their senior roles. You also let employees know that you’re willing to invest in their growth as well as the company’s.
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Keeps extra eyes on a job
Once your top prospects are being groomed, your company has a chance to reap perhaps its best tool to grow and thrive. This happens when a junior manager is sitting and talking with their senior leader about why they’re doing things a particular way.
The simple process of explaining the status quo helps reveal weakness in processes and procedures, uncovered sales opportunities and opportunities for positive change. This natural process allows your company to keep an extra set of eyes on its senior roles and encourages questioning of the corporate norms that may have become dated or inefficient.
In this way, succession planning results in future-proofing your company. Conversely, when retiring employees leave, they can act as a sounding board for questions and concerns, troubleshoot customer problems and more. This helps to smooth the transition.
Maintains brand identity
You frequently hear news of CEOs who come into a company from the outside with great promise, only to fail in a short time. Sadly, such disastrous hires often damage the company’s reputation and long-term growth along with them.
This usually happens because the outsider CEO doesn’t understand the fundamental values and mission of their new company because they haven’t “grown up” in it, so to speak. Wanting to put their own stamp on the business, or failing to grasp customer needs, they move the organization away from its core brand.
The benefits of succession planning is that it helps your company avoid this. By identifying and grooming an internal successor, your company ensures it will be led by someone who shares its values and deeply understands the company’s brand promise, its customers and its employees because they’ve lived it themselves.
Helps the company plan for the long-term
Change happens fast. When your company knows where it’s going, your team can plan for the future. If you position succession as part of your company’s overall growth plans, you create a path for retiring employees to hand off their years of hard-earned knowledge and transition important working relationships before they leave.
The objective of a succession plan is to help your company grow with intent as you identify and build plans for vulnerabilities in other areas of the business. Other benefits to succession planning may include providing help in ascertaining which areas require innovation, setting realistic goals for growth and planning for future talent needs that may result from that growth.
How To Develop A Succession Plan?
Review Plans & Identify Key Positions
It is mandatory to review the strategic plans and objectives of your organization. The first step in succession planning is to identify current or future key positions or groups in the organization. At this stage identifying key positions thoughtfully should be your only focus rather than candidates.
Listing The Competencies
All positions require a particular set of skills, abilities, and knowledge. Therefore, find and list the employees who are perfectly suitable for the corresponding job role. One way to list the competencies is to review relevant merit criteria and job description for the associated position and interview current and former job incumbents.
Identifying Potential Candidates
This step of succession planning is similar to that of general job recruitment practice. But the succession planning process goes one step ahead by helping candidates who show great interest in developing the requisite skills for the particular position. Helping and mentoring these candidates prior to the formal recruitment process that begins once, a position becomes vacant.
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Development Plans
Once you’ve found the relevant candidates suitable for the role, based on their potential for success and interest in a key position, the organization should ensure that these employees have access to development opportunities and learning tools.
Implementing The Process
The final step is to implement and evaluate the process. You have to plan the activities and inputs you have to make to get the desired outputs. Every step in this process has to be evaluated to measure the success and progress of the plan. It is essential to monitor the efficiency and effectiveness of the succession plan once it has been established.
Conclusion
Succession planning is a receptive decision by an organization to nurture and promote the continuous development of employees, and to make sure that the key positions in the organization maintain some measure of stability, thus enabling an organization to achieve desired business objectives.
Succession management is all about knowing the goals of the organization and its employees and improving the capacity to address emerging issues that will affect the business in the long run.
