Eyes on the Horizon: Developing a Succession Plan

What is Succession Planning and why you should be interested?

Succession planning is a process of identifying and developing internal people with the potential to fill key business leadership positions in the company. A succession planning process increases the availability of experienced and capable employees that are prepared to assume these roles as they become available. This has become even more important in today’s ever-changing and ever-aging business environment.

As our nation and the rest of the world begin to reemerge from the COVID-19 pandemic, observed workforce trends may make succession planning an even more relevant topic for organizations around the globe. Fry (2020) reported that 28.6 millionBaby Boomers were out of the workforce in Quarter 3 of 2020, demonstrating a3.2 million increase compared to Quarter 3 of 2019. In order to tackle the changes that will inevitably occur when individuals leave the workforce, organizations must be diligent in their planning.

Importance of Succession Planning

Planning for the future is not just a wise organizational decision, rather, it is necessary fora firm to maintain its identity. Succession planning is of paramount importance to both the internal and external values of an organization. A thorough succession plan puts forth the steps that a firm needs to take in order to preserve or better its value in the eyes of the public, stakeholders, and its own employees. Not only will this ensure survival of the company, but also that of organizational culture. An intentional succession process provides security and comfort for the organization, as well as a framework for the transfer of leadership. Furthermore, a 2018 Academy of Management study by Schepker et al.found that “formalized succession planning, as a form of procedural rationality, leads to better decisions, and thus, on average, better outcomes.”

Challenges of Succession Planning

Succession planning is of paramount importance, but often there are going to be challenges that arise throughout the process. Many of these challenges build upon each other, making a concise succession planning process all the more important. Although these challenges may arise at different times, they often follow a similar chronological order. What are some of these challenges’ organizations face?

Lack of direction

Many firms enter into the succession planning process with an unclear sense of direction. This stems from lack of clarity in both the decision-making process and the evaluation of the firm’s current state.

Little to no selection process

When you have minimal direction or procedures for selecting candidates, planning may take aback seat. By relegating this duty to the bottom of your goals, you are severely hindering your ability to plan for a bright future. Without a clear selection process, how can one identify and develop candidates before they are needed?

Unprepared leaders

When the leadership is unprepared, this can spread unease throughout the organization.Creating a culture of conflict avoidance in the organization can be detrimental to one’s ability to tackle business decisions, opportunities, and threats. Failure to discover, plan, and identify throughout your process will force key decision makers to either rush a decision or spend considerable time identifying and readying a candidate while the firm is leaderless.

Morale and retention

Throughout the succession planning process, your decisions will be measured by employees, competitors, and key stakeholders. When handled correctly, you can maintain or strengthen your firm. However, when there is a lack of process, you are signaling that the leadership is unprepared. The implications of this can cause finger-pointing and rushed decision making, which is devastating for firm morale.  The combination of limited alignment and low morale further weakens the organization’s ability to retain future leaders.

While these challenges are daunting, they are far from insurmountable.

Succession Planning Process

Although succession plans vary from firm to firm and their unique situations, there are several similarities that make up the well-made plan. Provided below are some key steps that an organization should take when going through strategizing its succession plan.

1. Discovery

• Develop and determine a shared understanding of your current state and value.
• By knowing your value, you can work to preserve it.
• Identify the challenges and opportunities that the firm faces.

2. Plan Development

• Be proactive in establishing a succession planning process, allowing you to account for the planning fallacy.
• Establish a strategic succession planning process strategy that ties into your firm’s value and strategic plan.
• This works to guide leaders to prioritize and establish timelines, as well as goals.

3. Identification

• Identify your specific key roles and make a profile of their skills, experiences, traits, and drivers.
• Identify where you will find candidates .

4. Implementation

• Make sure the leadership and those involved in the process are future facing and intentional with the work being done to develop and grow the next generation of leaders.
• Develop success profiles for key roles.
• Provide coaching and use your resources to help make their journey effective.
• Include activities in your process that help prepare the next cohort of leaders.
• Hold regular meetings on succession planning.
• Focus on key positions in the firm, not just those which are in need of immediate succession.
• Be transparent in your vision and criteria for succession, helping leadership, employees, and other key stakeholders to be ready for transition.

5. Transition

• Coach the new leadership as they move into their new role, helping to provide reassurance to key stakeholders, employees, and clients.
• Assess and evaluate the effectiveness of the plan.
• Adapt the plan if emerging situations make it necessary to do so.

Conclusion

While it’s easy to focus on the immediate tasks of our organizations, we must constantly look towards the horizon. As our leaders and employees increase their tenure or look for new opportunities, we must also be cognizant of the future. Despite the myriad of other priorities on our plate and the challenges of planning for the future, we must be forward thinking if we are to preserve our organizations. Put in the work of discovering who you are and what you value. Establish a thorough succession plan with your organization, then identify key elements and individuals. Maintain transparency within your organization and key stakeholders throughout the entire journey. Don’t just talk about your plan, implement it. The easiest way to work towards a brighter future is to put in the work today.