What is Succession Planning?

Succession planning is the process of identifying, developing, and preparing potential successors for key roles within an organization. This process includes assessing internal and external talent with the goal of ensuring that the organization is ready to meet any sudden changes in leadership due to retirement or other unforeseen events.

Succession planning can help organizations maintain continuity, build a strong leadership pipeline, and prepare for future opportunities.

Types of Succession Planning

Succession planning can be diversified into two types on the basis of time and the basis of location.

On the basis of Time:

1. Long-term Succession Plan

A long-term succession plan is a comprehensive strategy that companies use to ensure the future success and stability of the organization. It focuses on identifying and developing future leaders within the company over an extended period of time, typically several years.

The goal of a long-term succession plan is to have a pipeline of qualified and capable employees ready to step into leadership roles as needed.

2. Emergency Succession Plan

An emergency succession plan is a contingency plan that organizations put in place to ensure the smooth continuation of business operations in the event of an unexpected departure of a key leader or executive. The goal of an emergency succession plan is to minimize disruption and maintain business stability during a crisis.

An emergency succession plan should be flexible and adaptable to changing circumstances, and should be regularly reviewed and updated to ensure it remains relevant and effective. The success of an emergency succession plan depends on the preparation and readiness of the organization and its employees to respond quickly and effectively in the event of an unexpected departure.

A great example of emergency succession planning is Microsoft. In 2013, Steve Ballmer (then CEO of Microsoft) announced his replacement out of the blue. Thus began one of the most important CEO searches of the decade.

What Microsoft did wrong here was that they already did not have a succession plan to replace Ballmer. An extensive search for high-profile executives from companies such as Qualcomm and Ford was on the top of the list. However, these top-notch candidates took their names off the list.

Keep reading to know who (I know you know it) and how the replacement for Ballmer was found.

On the Basis of Location:

1. Internal Succession Planning

Internal succession planning is a process that organizations use to identify, develop, and prepare employees for future leadership roles within the company. The goal of internal succession planning is to have a pipeline of qualified and capable employees ready to step into critical leadership positions as needed, ensuring the stability and future success of the organization.

Internal succession planning requires the active involvement and support of senior leaders, HR, and the employees themselves. The success of internal succession planning depends on the investment of time, resources, and effort into the development and preparation of employees for future leadership roles.

Tapping back into the Microsoft story, finally, after 6 months when Microsoft was unsuccessful in finding any suitable candidate for the CEO position, an insider Satya Nadella who had served 21 years in the company was promoted to CEO.

The biggest advantage here to learn from internal succession planning is that because Nadella was an insider, he knew the company in and out and he pulled Microsoft out of the fiefdoms and made it a more collaborative and culture-fit company. He managed to take Microsoft to levels that we know today.

2. External Succession Planning

External succession planning is a process that organizations use to identify and recruit talent from outside the company to fill key leadership positions. The goal of external succession planning is to bring in new perspectives, skills, and experiences to the organization, and to ensure the continued success and stability of the company.

The Microsoft story as mentioned in emergency succession planning kind of overlaps with external succession planning because they were looking for a replacement outside the company.

Best Practices: Succession Planning

While you must have a good idea of succession planning by now, here are some best practices to keep in mind while developing your succession plan.

1. Advance Planning

Planning for succession is a proactive strategy rather than a response to rumors of a key team leader leaving. Keep in mind that effective succession planning might take up to three years, including training.

Decide on important positions right away. Think about the people in your present workforce who are particularly valuable and whose loss would have the biggest, most immediate impact. After that, begin creating succession plans for those responsibilities that continue past the subsequent position in the organizational structure.

2. Be Open with Employees

Without committing to specific tasks, ask folks in your talent pool about their aspirations and demonstrate your confidence in their abilities. Then, incorporate their training progress into existing performance management by making it part of weekly one-to-one meetings with their manager.

Instill Diversity at your Workplace

This comprises a diverse range of opinions, abilities, and skills as well as targeted DEIB activities that promote demographic diversity.

Be flexible and creative when selecting candidates for training in your succession plan because a fresh perspective can occasionally be just as helpful as experienced ones. Develop inclusive leadership abilities and actively involve your leaders in training on unconscious bias.

3. Seek Guidance

When in doubt, rely on your network of supporters. Are your executives, for instance, collaborating with career coaches to direct their professional development? Do you offer executive coaching to people who are headed for C-suite positions?

What kinds of opportunities for professional growth do you provide for your leaders? How can you ensure that your managers are developing the skills necessary for success?

Pain Points: Succession Planning

1. It takes Time

Problem: Yes, that's correct. Succession planning involves identifying and developing potential successors, creating development plans, and monitoring progress, which all take time and resources to properly execute.

Solution: Begin succession planning as soon as you can. It's best to be ready for when important roles within your organization leave, because you never know when they could. This necessitates often checking in with your leaders regarding their professional goals. It might also mean identifying future leaders by seeing their potential.

2. Succession Planning can be Unnerving

Problem: Some leaders may view the nature of succession planning as a threat. Some people can interpret succession planning as a lack of faith in your existing leadership team. Additionally, CEOs could be reluctant to bring up succession planning for fear of coming seen as departing from their positions. Your organization may suffer because of this unstable dynamic.

Solution: During the onboarding process, start a conversation with your key executives about succession planning. Tell them that while you hope they'll remain for a long time, you have a backup plan in case that doesn't work out. Any effective and powerful leader will understand the significance of succession planning.

3. It is not a cut-out Responsibility

Problem: Nobody is typically in charge of succession planning in many organizations. As a result, nobody accepts responsibility for it. The idea of succession planning having its own program may be unappealing to some stakeholders.

Solution: Discuss who will be in charge of succession planning inside your organization at a meeting with your senior team. It might be the board of directors, a special board committee, human resources, people operations, or functional leaders.

Closing Thoughts

In conclusion, Succession Planning is an important process for ensuring the long-term success and stability of an organization. It involves identifying and developing future leaders, creating a roadmap for transition, and preparing for unexpected events.

To create a pipeline of qualified prospects, evaluate your prospects using HireQuotient's skill and video exams. You can also incorporate prospects from all around the country by using EasySource, a respected candidate sourcing business that can satisfy all of your sourcing needs. Effective succession planning requires ongoing attention and commitment from leadership, as well as regular communication and collaboration between departments. By investing time and resources into this process, organizations can secure a strong future and minimize disruptions during leadership transitions.

Succession Planning: Best Practices and Pain Points