Succession Planning

Succession planning is how an organization strategically develops a broad, deep talent pipeline. Many organizations think they engage in succession planning, but what they’re really doing is “replacement planning.” They’re identifying immediate successors to take over a specific position in the organization in the event of an emergency or unexpected retirement. Typically, these organizations focus on replacing indispensable roles in the C-suite: CEO, COO, CFO, and the like.

But succession planning is broader than looking for a replacement for a top position. Succession planning requires an organization to consider how it is developing talent at every level.

Succession planning also requires looking at more than one candidate who may a suitable replacement for a variety of positions. It considers multiple candidates for a role. (A rule of thumb is to consider three people for each role.)

Effective succession planning is data-driven. That means organizations use comprehensive assessments to identify their talent’s strengths and weaknesses. Organizations then compare their assessment results against the requirements and capabilities needed to fill a role as well as the organization’s requirements. If the assessment reveals any gaps, the organization creates a plan to close them through a structured development plan.

When organizations engage in effective succession planning, they meet several objectives:

• They ensure they have the talent they need to achieve their strategic goals.
• They reduce the risk of having too few “ready now” candidates.
• They attract, engage and retain high-quality candidates.
• They address stakeholder pressure to plan for the future.

To develop a succession plan, you must understand the talent you need as well as the talent you currently have.

You need to take a holistic view of your talent pipeline, from your C-level executives down deep into your organization’s talent pool. There, you’ll find incredibly valuable people that you can start investing in for future significant roles. Many of these people may be hidden in professional roles — those with specialized skills and expertise that are essential to the organization’s success but who may not be in a traditional leadership role.  

To start developing this talent, take these steps.

1. Agree on your organization’s future direction. If you don’t yet know where you’re going, take time to decide on your organizational strategy before recruiting talent. Make sure your leadership team is aligned around your vision.
2. Consider what types of people you need for your leadership roles. Who will be able to execute your strategy over the next five years?
3. Build a formal process to evaluate your current internal talent and external talent. To get the most accurate evaluation, you’ll need to use data-driven assessments of your talent, which will help you identify gaps that you need to fill as well as learning opportunities to develop your internal bench of talent.

Succession planning is critical to ensure an organization has the right people in the right roles at all times. When there’s a mismatch between talent and roles, it can damage performance and lead to business irrelevance, especially in today’s highly competitive, fast-paced market. Maintaining strong leadership is essential to executing strategy and navigating disruption and uncertainty, but it’s particularly challenging for organizations to get right.

When organizations don’t promote or hire the right candidates, it can be costly. Productivity might plummet because employees might become disengaged or suffer from low morale. Great internal candidates may be frustrated, feel alienated or leave the company altogether. In the long term, these problems add up and can cause the organization’s competitiveness to decline.

Most organizations aren’t satisfied with their succession planning outcomes. A succession planning consultant can step in with an objective perspective on what’s happening in the market rather than just in your organization and help you plan better for the future.

Succession planning consultants can help organizations draw up a succession management plan that accomplishes a number of goals:

• Provide key intelligence on critical roles
• Explain what is driving vacancies and gaps
• Assess the traits and drivers of your people
• Identify talent gaps that you need to fill
• Create a common language for talent, potential and development
• Set a framework for considering hiring, promotion and training priorities

Succession management addresses filling the entire leadership pipeline. It begins with the senior executive level and traces down into the organization and across various functions. Succession planning, on the other hand, takes into account the development of two or three generations of talent who are in line to fill a leadership role.

Sometimes succession planning takes the form of replacement planning, which is considering candidates who would take over a C-suite executive’s role if the incumbent were no longer capable of serving in their role. But true succession planning and succession management go deeper. They consider multiple candidates for each role in the organization.