Succession planning is the process of identifying and developing employees to take over key roles and responsibilities within an organization. Effective succession planning can help ensure that there is a smooth transition when key employees leave the organization, whether through retirement, promotion, or other reasons. Succession planning is a bit of an art if it’s carried out effectively. I’m an advocate of the principle of fairness, openness and transparency. Without these principles, succession planning can disincentivise employees.
What Research Shows
Research shows that companies with effective succession plans have a higher chance of success than those without one. However, despite that businesses are simply not undertaking the planning. ATD’s Study found only 35% of organizations have a formalized succession planning process in place.
Effective succession planning can help organizations retain key employees. According to Gartner, just 25% of employees are confident about their careers at their current organisation. By providing a clear path for advancement, organisations can increase career confidence, employee engagement and motivation.
The Case for Succession Planning
This essential leadership tool helps us to develop effective ways of managing talent as well as a means to fill critical and other roles. In its purest form, it is to make sure that the organisation can continue to function with the right people, and with the right skills at the right time. Some spin-off benefits of succession planning can be bringing in new and fresh talent or motivating existing employees with a clear career path. Succession planning helps ensure that an organization can continue to function effectively even when key employees leave. This can reduce the risk of disruption to the organization. as well as the cost of finding and hiring replacement employees. Additionally, succession planning can help identify and develop new leaders within the organization. This can help ensure the organization continues to grow and evolve.
Research shows another important benefit of succession planning is that it can help retain key employees. When employees feel that there is a clear path to advancement within an organization, they are more likely to be engaged and motivated to perform at their best. This can reduce turnover and help the organization build a strong, stable workforce.
Finally, succession planning can also help organizations respond to changes in the marketplace or industry. By identifying and developing employees who have the skills and knowledge to adapt to new challenges, organizations can remain competitive and thrive even in uncertain times.
Successful succession planning
As we all know sadly in 2011, Steve Jobs, the CEO and co-founder of Apple, passed away after a long battle with pancreatic cancer. Although Jobs was seen as the driving force behind the company’s success, he had put in place a strong succession plan. The plan involved identifying and developing key employees who could take over his responsibilities. Tim Cook, who had been serving as Apple’s Chief Operating Officer, was named as the new CEO. Cook’s appointment was a smooth transition, and he has since been able to maintain the company’s success and even grow it further.
Johnson and Johnson has a history of successful succession planning. The company has a formal process in place to identify and develop future leaders. Many top executives have been promoted from within. Johnson and Johnson’s CHRO Peter Fasolo, HRE’s 2022 HR Executive of the Year, prepared to install a new CEO last year, when Alex Gorsky, announced he was leaving. His successor, Joaquin Duato took over in 2022.
developing A succession policy
How you shape your succession plan will be distinct for each business. Here are some factors to consider when shaping your succession plan.
Be clear about why you want to introduce succession planning. Is it to recruit new and evolving talent? Is it to develop new leaders/managers/specialists in the future?
Communicate openly about why you want to introduce succession planning with your current workforce. Spell out the possibilities and opportunities for your employees.
Develop clear criteria
Be clear about the criteria you are going to apply to any succession planning exercise. Communicate it widely. Make sure that the criteria ensure inclusivity and fairness, openness and transparency are core principles in play.
Keep it structured. Make sure that you and everyone know how it is going to work. They know what they can expect. Align other employee lifecycle events with the succession plan where needed.
Be open to attracting talent from everywhere. There may be someone in your current workforce, who might not be displaying the characteristics for future job filling now, but with an open invitation, they might just go for it.
Clear the path
If you decide the future is through a graduate scheme, try to make it accessible for existing workers. There is nothing more annoying than doing a great job and being told that you can’t compete because you need a degree.
Link with feedback
Tie your succession planning to your appraisal/feedback scheme. It’s essential to communicate succession planning avenues when thinking about career development.
Steps to Effective Succession Planning
Effective succession planning involves several key steps. First, it is important to identify the key roles and responsibilities within the organization that are essential to its success. This can include positions at all levels, from entry-level roles to executive positions.
Once these key roles have been identified, the next step is to identify the employees who have the potential to fill these roles in the future. This can involve evaluating the skills, knowledge, and experience of current employees, as well as identifying any gaps that need to be filled through training or development.
Once potential successors have been identified, the next step is to develop and implement a plan for their development. This can include providing training, coaching, and mentoring, as well as offering opportunities for job shadowing or cross-training. It may also involve identifying stretch assignments or other opportunities for employees to gain experience and build their skills.
Throughout the succession planning process, it is important to communicate with employees about their potential for advancement and to provide regular feedback on their progress. This can help employees feel engaged and motivated, and can also help ensure that the organization can retain top talent.
One of the biggest confusions I have seen when considering effective succession planning is when people are identified to step into a post in the case of an emergency. The practice of naming specific people to replace an incumbent is not succession planning. It is a contingency plan. Succession planning and contingency planning are two distinct concepts that organizations use to manage risk and ensure business continuity. Here are five main differences between the two:
Succession planning is focused on identifying and developing internal talent to fill critical roles within an organization over time, while contingency planning is focused on preparing for and responding to unexpected events or crises that could disrupt normal business operations.
Succession planning typically takes a longer-term view and is concerned with developing talent and preparing for leadership transitions over years, while contingency planning is typically focused on short-term responses to unexpected events
Succession planning is typically more narrowly focused on specific roles and individuals within an organization, while contingency planning is broader in scope and may cover a range of scenarios and potential risks.
Succession planning is generally a proactive process, focused on identifying and developing talent before it is needed, while contingency planning is reactive and designed to respond to unexpected events as they arise.
The ultimate goal of succession planning is to ensure that an organization has a pipeline of qualified talent ready to step into critical roles when needed, while the goal of contingency planning is to minimize the impact of unexpected events on an organization and ensure that it can continue to operate under difficult circumstances.
Even a contingency strategy like this can cause resentment if the person identified is not the right one. To use a contingency strategy properly, employees would have no doubt that the person to step in, in the case of an emergency was the right person. Someone with the right skills, and the process fits with the organisational ethos.
In conclusion, effective succession planning is essential for the long-term success of any organization. By identifying and developing key employees, organizations can ensure that they have a strong, stable workforce. A that is capable of adapting to new challenges and opportunities. Whether you are a small business owner or the CEO of a large corporation, taking the time to develop a succession plan can help ensure that your organization continues to thrive for years to come.
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