You can't afford to delay succession planning
Would you be prepared if a key employee resigned, became ill, or had to be fired?
Do you have a flat organization without middle management, causing a large skill gap between senior leaders and the next level down?
Do you have ineffective leaders staying too long in positions, thereby blocking others from advancing?
What about leaders who are so integral to their team that, if they left, the team would cease to function effectively?
Vacancies in leadership roles are inevitable, yet some businesses delay or simply don’t know where to start preparing to fill these roles. Vacancies can easily catch you off-guard: Key leader departures can result from untimely deaths, illness and retirements/resignations just as easily as they can stem from performance issues. When coupled with a lack of focus on developing internal talent, this void of planning can leave gaps and lead to instability in an organization.
A little preparation goes a long way, and peace of mind may well lie in careful succession planning. Through succession planning, businesses identify and develop internal talent to fill key positions. This enables a company to build pools of talent that can be drawn upon to handle challenging assignments and roles of greater scope and responsibility on short notice. It also demonstrates to stakeholders a commitment to sustaining the business, even in times of difficulty and change.
Making It Work
What drives the effectiveness of succession planning? It must be part of a holistic approach to managing talent. Here are a few key elements:
Identification of the key roles for which succession plans are needed and the critical capabilities in these roles. Don’t think about the person in the role today; think about what is needed in the role—now and in the future. Consider including positions that:
- Are difficult to replace because of the level of leadership experience needed.
- Are difficult to fill because of technical or functional skills needed (e.g., head of IT, CFO).
- Would present a large risk if left vacant for too long.
- Will be created in the future to support a new function, program, project, initiative, etc.
Consistent talent reviews completed on an annual (at a minimum) basis. These are discussions on the performance and potential of current and emerging talent who are interested and available to take on key roles. Doing this well requires consensus from management on how the organization defines performance and potential. Keep it simple; focus on objectivity (not politics) and over time, management will improve their ability to evaluate talent.
Focus on leader development. There must be follow-up from talent reviews—stretch assignments, rotation to a different role, more development in the current role. The best way to know if employees are ready for the next level is to test their abilities before you’re in a time of need. The rhythm of talent reviews will emphasize that the organization expects there to be action taken between reviews. If you are not committed to taking action on development plans for your leaders, don’t bother with any of this.
Active support from senior leadership. While HR plays a critical role in succession planning, this is not an HR exercise. Senior leaders must support the process by actively participating, rewarding the right behaviors (e.g., managers giving their high-potential direct reports the right opportunities, even if it means they move to work in another business area), and holding leaders accountable for the development of these high potentials.
There may be times that an organization does not have someone ready when a position becomes vacant. This may require a search for external talent. Organizations need to strike a balance between identifying key external talent and developing internal talent to ensure the right person is always in the right role.
You Can Expect Some Challenges
If you have a small business with few key people in your talent pool, this process can be more difficult—you don’t have as many choices as others might, and there are fewer opportunities for challenging developmental assignments. But, this process can be scaled to smaller businesses, and it is just as critical for a small business to know it has a potential CEO in the pipeline as it is for a large corporation—or at least to know ahead of time that the strategy will be to go external for a new leader candidate when the time comes. This planning adds value by preventing you from being overly reactive after a departure, decreasing both stress and the chance that you’ll make a hasty staffing decision.
Lastly, if your organization has not taken a critical look at your in-house talent like this before, you may find that some leaders are uncomfortable with the differential treatment of high-potentials. I have often heard, “Shouldn’t we be developing everyone? Won’t this make those not getting special treatment feel bad?” Often the answer is “Yes and yes”. Your employees, regardless of their role or their potential, should always be learning and growing. It is important to recognize that everyone is not a high performer, and everyone does not have the potential (or the desire) to take on new and unfamiliar challenges. Your organization must focus on developing pools of strong talent who will provide a continuous leadership pipeline if the organization is to survive and thrive long term.
Companies simply can’t afford not to have a clear picture of their current and future leadership depth, and succession planning is a great place to start.
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