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Succession Planning: What It Is & Why It’s Important

The unexpected loss of key leaders can throw a real wrench into the works for organizations, especially in the current climate of steep competition for talent. Starting a hiring search from scratch can be frustrating, time-consuming and expensive. That’s why it’s imperative for organizations to prepare to replace crucial positions before there’s a frantic need. A proper succession planning process is the answer.

 

What is Succession Planning?

Succession planning is a process in which an organization prepares to fill positions and retain skills and knowledge when senior leaders leave. Research shows employees at companies that hire and promote more internal candidates stay 41 percent longer than workers at companies with lower internal hiring rates, according to LinkedIn’s 2020 Global Talent Trends report.

 

Why is Succession Planning Important?

Effective planning makes succession a managed event rather than an unexpected crisis. It ensures leadership continuity, which contributes to overall smoother sailing for the company—including better business results, higher employee retention and better organizational morale. Succession planning is important when it comes to safeguarding institutional knowledge, making sure it doesn’t leave the company when senior leaders do.

 

Benefits of Succession Planning

 Succession planning brings several benefits, including:

 

  • Ensuring business continuity with smooth transitions of leadership and transfer of institutional knowledge
  • Reducing disruptions and risks
  • Identifying future leaders and taking the time to develop them well in advance 
  •  Boosting employee morale and retention by investing in employees’ development and future prospects with the organization

 

Key Elements of Effective Succession Planning

 Effective succession planning requires a thorough analysis of an organization’s leadership structure and needs. The goal is to determine what actions need to be taken immediately, as well as over the medium and long term, in order to keep leadership strong on an ongoing basis.

 

One of the foundational steps in this process is cataloging and defining roles and responsibilities throughout the organization and understanding how those roles relate to each other. Next, you can identify potential successors and assess what they need to effectively move into leadership roles. Company-sponsored training and development programs are often a key element of this preparation.

 

With this information, you can create a succession plan and timeline that details the steps that candidates should take to prepare for leadership. This plan should be communicated to stakeholders so that everyone is on the same page. 

 

Obstacles to Succession Planning

 In designing your process, you should prepare for common obstacles that can come up.

 

Internal Resistance to Change

 Although succession planning provides a number of organizational benefits, not everyone will be immediately on board. Not everyone likes to think about things ending. Some leaders in the organization may be resistant to sharing knowledge; managers may see succession programs as a burden on their time or they may want to hold on to their best performers. Program planners should anticipate these arguments and clearly lay out the business case for its importance and need. Starting small, perhaps with one major function, can create a success story that can help allay concerns.

 

Organizational Silos

 Business unit silos can make it difficult to identify promising candidates and share knowledge. Proper succession planning can start by working with functions that are partially shared among different units. Planners can connect people across units for temporary assignments, projects or conversations to develop more cross-unit collaboration.

 

Equitable Opportunities

 In many organizations, succession opportunities have often been decided in an ad-hoc way by a few leaders who may not have a holistic view of the organization, meaning that many potential succession candidates have been overlooked. This has been particularly true for underrepresented populations such as BIPOC and women. A formal succession plan should include processes that root out bias and allow the organization to better discover potential talent in an equitable way.

 

Lack of Buy-in from Key Stakeholders

 Without buy-in from key stakeholders, you may not get very far in executing an effective succession planning program. It’s key to communicate early and often with stakeholders so that they clearly understand your plan. You also need to understand any concerns or roadblocks on their side and find solutions that will work for everyone involved. 

 

Limited Resources and Time

 Time is of the essence—and most of us don’t feel that we have enough of it. The resources needed to effectively carry out a succession plan—including money, expertise, and human resources—may appear scarce as well. The key here is to establish the importance of effective succession planning for the future of the organization and make sure it gets the priority it deserves.

 

Uncertainty About the Future

In any given organization in today’s business climate, it can sometimes feel that change is overwhelming and that business evolution outruns any attempt to plan ahead. It’s certainly true that a succession plan should be flexible enough to adjust as needed. But having some kind of plan in place will give the organization a big advantage over no plan at all, even if it needs to change along the way. 

 

Utilize Mentoring as a Succession Planning Template

Mentoring programs are very effective at identifying employees with high potential and pairing them with experienced partners who can help them grow and thrive. Mentoring focuses on building personal relationships that help make the organization stronger, one person at a time, in order to achieve long-term goals. 

Pairing high-potential employees with leaders in the organization can set up knowledge transfer and build greater institutional understanding for newer generations of employees. Using a mentoring template within succession planning can give your efforts a head start.

Succession planning best practices

 Following established best practices can help your organization achieve optimal results.

 

1. Evaluate current data

It’s important to understand your organization’s current succession needs and issues in order to plan what needs to be done. Identifying data points such as how much of your workforce is currently eligible to retire and which positions take the longest to hire for will help you create an objective baseline for your planning program.

 

2. Do your homework

Identifying potential candidates is key to succession planning. It’s crucial to make sure that you know what you’re looking for in a candidate, and that you conduct a thorough search. This means objectively establishing the qualities and experience that define the ideal candidate. You should look beyond obvious next-in-line employees to make sure you are including the best possible candidates, regardless of their current position.

 

3. Establish expectations

Your succession planning process should be transparent both for candidates and the leaders who are working with them. Make sure that candidates are ready and willing to move forward, and that leaders and successors understand their respective roles and obligations.

 

4. Involve employees and stakeholders in the process

Succession is a multifaceted issue, and it’s helpful to have multiple perspectives to add to the planning mix. Soliciting feedback and ideas from both employees and stakeholders ensures that you’re getting a 360-degree view. It also goes a long way toward crucial buy-in from both groups.

 

5. Align the plan with the company’s strategic goals

While a good succession plan will delve into the details of how succession should proceed on a granular level, that’s not where it begins. The overarching guide to any succession plan should be the high-level mission and strategy of the organization. Starting from there and working your way down to the day-to-day logistics ensures that the plan supports the larger goals of the organization.

 

6. Develop a diverse pool of potential successors

It’s important to ensure that succession programs include groups of employees that have been historically underrepresented. Make sure the talent pipeline is drawing from diverse and inclusive backgrounds and functions, beyond internal recommendations or those closest to the existing role. The goal of succession planning is to prepare employees for future potential roles—not pre-selecting successors. This approach keeps opportunities open and encourages a wide-ranging search for candidates.

 

7. Evaluate and adjust the plan regularly

No succession plan should be written in stone. Business objectives and environments can and will change, along with the goals and circumstances of potential succession candidates. It’s important to regularly take a look at the plan’s effectiveness and adjust as needed.

 

8. Seek outside expertise and support

If your organization is new to succession planning, you don’t have to struggle on your own. Outside resources and experts can be invaluable in helping you create a succession plan that can serve your organization now and into the future.

 

Overhaul Your Succession Planning Process with Mentoring

Businesses of all sizes can realize big benefits through succession planning in terms of business continuity, maintaining institutional knowledge, employee retention and more. Mentoring is a key tool in succession planning, offering a personalized way to help an organization discover and develop potential leaders. Mentoring programs can help companies create a succession process that keeps an organization operating optimally, regardless of leadership changes.

 

Find out how Chronus mentoring software can help you optimize your succession planning.

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