Succession planning is a process that involves the identification and development of future leaders across all levels within a company. In essence, succession planning is a way for businesses to prepare for the future. The process ensures that when a key employee decides to leave, the company has someone else in the pipeline to fill their position.
Understanding succession planning
Succession planning is not just a way to navigate inevitable change, however.
It also enables companies to retain key talent who tend to be the employees who need the most clarity on where their career is headed.
The most effective succession plans, like most other strategies, are those that are reviewed on a routine basis.
Rather than looking at the organizational chart for an hour or two and never returning to it, leaders should aim to revisit their succession plans at least once a year.
Have there been any changes since the last review? Is the plan still on track?
How to create a succession plan
Below is a seven-step process for succession plan creation split across three distinct phases.
Assessment phase
Identify challenges
The process starts with the business listing any challenges it considers significant in the next 1-5 years.Â
Identify critical positions
What are the critical positions the succession plan will be built around? These positions are those that have a high vacancy risk or are vital to the company carrying out its mission.Â
Identify skills, knowledge, and competencies
What are the key success factors for each of the critical positions? Include core and technical competencies as well as institutional knowledge and relationships.
Evaluation phase
Assess employee potential
In other words, are there existing staff who are either ready to assume a role or have the potential to grow into it over time?
Include HR staff in this step to include or exclude employees who may be eligible.
Select employee competencies
Each employee is unique, and so too is the succession plan that will guide their progression.
Most will comprise a combination of assignments, mentorship, training, and coaching, with career development conversations usually occurring as part of performance reviews.
Development phase
Capture knowledge
In the sixth step, it is important to capture the knowledge that an employee possesses before the depart the organization.
This is especially important in the modern era where what employees know or think is more important to the company than what they do.
Develop a talent pool
This pool ensures that there is a ready supply of talent able to step up and fill critical positions when needed.
To enable this succession, a tailored career development pathway must be devised for each individual.
Succession planning best practices
Here are a few succession planning best practices to maximize its effectiveness.
Be proactiveÂ
The retirement of a key employee is something a business can prepare for, but succession planning is rarely so predictable.
To avoid being exposed to a sudden or unexpected resignation, it’s important to be proactive and develop a plan (even in times of relative stability).
Conduct a trial runÂ
While an employee’s suitability for a role can be vetted to some extent, the business will never know for sure until they assume it.
Instead of waiting for a crisis to put the individual to the test, it is safer to have them fill in for a superior on vacation, for example.Â
This enables the company to assess their performance and identify areas for improvement.
Trial runs also provide the employee with valuable experience and an opportunity to showcase their skills.
Understand the company
Like many other processes, the key to effective succession planning lies in management’s ability to understand the company and where it wants to be in the future.
When management has a clear understanding of the company’s mission, vision, and values, it can better identify leaders that align with its objectives.
Key takeaways
- Succession planning is a process that involves the identification and development of future leaders across all levels within a company.
- The succession planning process will vary from one company to the next, but in general, it contains seven steps: identify challenges, identify critical positions, identify skills and competencies, assess employee potential, select employee competencies, capture knowledge, and develop a talent pool.
- Businesses must be proactive when developing a succession plan to better protect themselves from unforeseen circumstances. They should also conduct a trial run to ensure the employee’s skills and competencies transfer to the new position.
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