I believe that succession planning for key roles is one of the most overlooked competencies in organizations.
What is succession planning?
The Economic Times defines succession planning as a process by which individuals are scanned to pass on the leadership role within a company. The process ensures that business continues to operate efficiently without the presence of people who were holding key positions as they must have retired, resigned, etc.
Succession planning is the process where an organization ensures that employees are recruited and developed to fill each key role within the company. In this process, you ensure that you will never have a key role open where another employee is not prepared.
Why is it important?
The comprehensive article “Succession Planning: What the Research Says, Most Organizations Aren’t Prepared” by Harvard Business Review tells us that there is a high price for this lack of planning and that:
Though turnover among CEOs is rising, only 54% of boards are grooming a specific successor, and 39% have no viable internal candidate. The consequences of poor planning are serious: Companies that scramble to find replacements forgo an average of $1.8 billion in shareholder value.
How can I create one?
Succession planning does not need to be complicated. Here are my five steps for creating your own:
- Identify key positions where having a vacancy in the role would be detrimental to the business strategy
- Identify your organization’s needs
- Define a succession plan that covers the identified needs
- Appoint a successor and mentor for each role that has been identified
- When the time is right or a vacancy happens, make the transition
Recommended Reading: One of my favorite books is “Hope is Not a Strategy” by Rick Page. When it comes to succession planning for our key roles, this is absolutely true. Vacancies in key roles happen with and without notice, and this is something we need to prepare and plan for.
Also, the Society for Human Resources Management has a comprehensive article “Engaging in Succession Planning” that can help you with further research.
Does your company have a people strategy that includes a detailed succession plan for key roles?
I would enjoy hearing about your strategy in the comments below or contact us if you need help with yours.