What Is Succession Planning?
There’s a common myth circulating within the business world that succession planning is a tool that’s reserved for only large organizations with extensive people management departments and resources to devote to them. This couldn’t be further from the truth. Succession planning is a helpful tool that even small businesses can implement extensively.
Exactly what is succession planning in HR, though? There are many succession planning examples and strategies that you may not be aware of, or even some types of succession planning that could already be occurring within your organization.
There are two main camps when it comes to succession planning: 1. reactive and 2. proactive planning. If you’re wondering which type is the “ideal” type, you’ve probably already guessed it: proactive is always preferred.
Reactive Succession Planning
Reactive succession planning can take several different forms: it can look like a search for a new external hire to fill a C-Suite executive or higher-up manager position, selling a majority of shares in a company, or even total liquidation and winding-down of the company. These are not preferred methods of succession planning, but sometimes, they’re required. Reactive succession planning may be contingent in nature or a temporary measure, but these types of succession plans are typically a response to an unforeseen or emergency situation.
Proactive Succession Planning
Proactive succession planning takes a bit of forethought and effort but pays dividends in the end. This type of succession planning involves deliberate, long-term methods such as identifying potential for growth within your existing talent, cross-training employees with those a level above and below them, and recognizing gaps in your corporate structure. This type of planning is not an isolated activity; rather, it is a process that should be constantly occurring in the background of your organization.
Succession Planning Process
Every company will have different succession planning goals, examples of what they’re looking for when it comes to future growth, and implementation timelines. As a result, your succession planning process will be unique to your company. All companies, however, can benefit from considering their tailored strategy through the lens of a few key succession planning tools. We’ll discuss these in terms of the four general stages of succession planning:
The 4 Stages of Succession Planning
1. Define What (And Who) Your Company Needs
Defining what your company needs in terms of filling potential future gaps is one of the major challenges of succession planning, if only because it’s the first hurdle. The gap could be obvious: for example, the promised (and looming) retirement of a key executive; or it could be more obscure: perhaps you have doubts as to whether a certain higher-up is happy with their role, or looking for a new job elsewhere.
Either way, locating the gap to be filled is the first rung on the succession planning ladder. This identification will then allow your company to define what it wants in this leader: consider, for example, whether you want nearly identical qualities to the last individual in the position, or something new.
2. Decide Whether You Have the Talent You Need Internally
The next general step will be deciding whether you have an individual within the company whose talents you can develop, or if you want to make an external hire. Tools like HR software can help interpret your current skill data to create talent pools, and get your existing workforce upskilled for future roles.
3. Delineate the Steps You’ll Take to Grow the Talent You Need
Once you’ve located an individual to invest in (internally or externally), create a plan for training them for their future role. What skills do they need to develop? Do they need to shadow the holder of the current position? Work across different teams to get a “bigger picture” of the entire company? A game plan with time frames and measurable objectives will bring life to your succession plan.
4. Develop a Long-Term Process for Company-Wide Growth
Once you’ve hit your stride with your stride with your first individual succession plan, take your HR goals a step further by implementing an attitude of proactive succession planning across your entire organization. This may take the shape, for example, as a policy of cross-training, so that an employee can step in and step up at a moment’s notice.
Why Is Succession Planning Important?
The importance of succession planning can’t be understated. Reactive succession planning can cost companies financially, cause current employees to lose trust in their leaders, and lead to lost invaluable information. Instead, you can utilize proactive succession planning strategies and long-term paths to success (a.k.a. “leadership succession planning” or “career succession planning”) in order to increase retention and employee engagement within your firm.
If your organization runs into an unexpected situation where you’re forced to use reactive succession planning methods, don’t fret. Of course, there are advantages and disadvantages of succession planning when you’re up against a wall: sometimes, companies can identify great successors in employees they didn’t know were up to the challenge. Lean in to methods of sourcing talent from within, using approaches like the analysis of current employees’ performance review metrics and interest in long-term plans within the company. If you don’t currently have a way to pinpoint this data, HR software can help you discover existing and needed skill sets and design future career pathing.
Succession Planning Framework
There are many methods of succession planning and ways to structure your internal growth processes. Regardless of how your company develops its talent, the way you identify it should incorporate a solid methodology. Your succession planning toolkit should have an intelligent solution to help build a framework connecting all areas of talent management. Consider software designed to help assess your existing talent’s skills, build their career paths, and ultimately, help close skill gaps to get them ready for succession.
Your talent management and succession planning strategy can be two-pronged: develop a long-term attitude of internal career growth to fill gaps within your company when they arise, and use intelligent tools to help you make sense of what you’re looking at. If you’re interested in learning more about how TalentGuard can help, request a demo today!