If a key manager or executive left you without warning, how well would your company handle the change?
Change – in market conditions, technology or key leadership – is an inevitable part of business. Whether that change is gradual or sudden, every organization must be able to manage it successfully to thrive. Succession planning is an essential component of change management. It helps companies plan for, and effectively manage, transitions in key leadership positions.
Why is succession planning so important?
Beyond the obvious critical function of seamless leadership transition, a sound succession plan allows you to:
- Plan for disaster. Whether it’s an aggressive illness (like Apple’s Steve Jobs faced), a natural catastrophe, an economic crisis or an abrupt retirement, a succession plan prepares your company for disaster. By developing successors and contingencies now, you’ll be properly positioned to handle a worst-case leadership change scenario.
- Increase employee engagement and retention. Investing in your employees’ professional development demonstrates that you’re committed to their futures with your organization. When employees feel like they’re an integral part of the company’s success, they’re more motivated to perform for and stay with you.
- Head-off potential skill shortages. Succession planning forces you to critically examine your long-term skill needs. By anticipating these needs and looking at your available talent pool, you may be able to identify potential skill shortages and address them now (by training existing employees or recruiting new talent) – before they become critical.
- Breed a culture of strength. Succession planning strengthens interdepartmental relationships because it requires increased communication and collaboration. Working together for the common good of the company increases synergy, keeps your employees focused on the future and ultimately builds a culture of strength.
If succession planning is so vital, why doesn’t every company do it?
Among other things, the process can be time- and labor-intensive. These days, many employers are so focused on surviving the next few months that they don’t invest the time and energy needed for adequate long-term planning.
While this is certainly understandable, it’s also unwise. To remain competitive, your organization needs to start assessing, planning and developing leaders now – before talent needs become talent crises.
How can you make succession planning more effective?
Go into the process with realistic expectations. Rome wasn’t built in a day, and neither will your company’s succession plan. Start by finding out where you are most vulnerable:
- identify the top skills you will need in the next five years;
- prioritize your company’s most critical positions;
- identify high-performers who are nearly ready to step into those critical positions;
- analyze your workforce to determine who will be eligible for retirement within the next five years.
Use this as a starting point to create a prioritized list of goals for the process. Focus on developing only the highest priority action items. Once you have begun executing succession planning strategies for your most essential or at-risk leadership positions, you can begin expanding the process.
Don’t wait until tomorrow. The truth is, you never know when your next key employee will leave. Protect your company and remove some of the stress associated with leadership change by planning for future needs now. Careful planning ultimately minimizes workforce disruption, reduces knowledge loss and increases employee engagement by providing clear career development paths for your best employees.
Define criteria against which to measure employees’ potential. The ultimate goal of any succession plan is to create a thriving organization that outlasts its individual employees, by continually developing new leaders with the greatest potential. But potential for what? Work together with key executives to map out the future requirements for success in key positions (i.e., what tomorrow’s leaders must be able to do to succeed in their roles). Use these criteria as a measuring stick for evaluating each individual’s potential.
Assess current employees’ skills and make plans to close the gaps. After you’ve defined criteria for future success, you must invest the time and money to find out what your staff can really do. Popular assessment tools include: assessments from the candidate’s circle of influence; career achievement summaries to capture work experiences; psychometric tools; behavioral interviews to probe against established criteria for success. Once you understand where your promising leaders are, and where they need to be, customize talent development plans to close the gap.
Stay committed to the goals – not just the process. By nature, succession planning requires a lot of forms, charts, meetings, checklists, etc. As you engage in your efforts, remember that the planning process is not an end in and of itself, but a precursor to real employee development. Plans do not develop anyone – experiences do. Keep your focus on creating development experiences that will prepare your most promising employees for future leadership roles.
Keep your talent involved. Let your best employees know about your plans for them and involve them in the development process as much as possible. As they progress in their growth, keep these promising leaders updated on hiring decisions. Most importantly, make sure their career aspirations align with your succession plans, to keep you both working toward the same goal.