4 Key Elements of a Successful Succession Planning Process
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In today's unpredictable business landscape, ensuring continuity and stability within organizational leadership is crucial for sustained success. One way to ensure your leadership team remains stable and representative of your top talent is through a thorough succession planning process. Rather than replacement planning, which is a reactive process to fill a role when key employees depart, succession planning is the deliberate and systematic process of identifying and developing individuals who have the potential to fill key leadership positions within an organization.
During succession planning, a human resources professional (or a talent management team) is responsible for facilitating a process in which talent is made ready for future leadership roles in the next six months to five years. In this approach, the senior leadership team supports the talent management team in mapping leadership skills, critical positions, and/or competencies of the present and future to strategic priorities and business objectives. While various approaches to succession planning exist, it is important to choose the most appropriate approach to your organization’s needs and strategic plan.
Why is the succession planning process important?
Implementing a succession planning process provides a structure where team members' talent reviews are directly linked to developmental action plans. These plans, in turn, establish possible pathways for potential future leaders, accounting for the organization’s overall strategy and current talent pipeline strength.
Benefits of succession planning include:
Ensuring Business Continuity and Minimizing Disruptions: Research shows that companies with effective succession plans are better equipped to handle leadership transitions, reducing negative impact on business operations, productivity, and morale.
Retaining Top Talent and Enhancing Employee Engagement: Employees perceive succession planning as a commitment to their growth and professional development. This boosts morale and fosters loyalty, ultimately contributing to higher engagement and retention rates among top performers.
Facilitating Knowledge Transfer and Preserving Institutional Memory: With an aging workforce, the loss of institutional knowledge is a pressing concern. Successful succession planning involves capturing and transferring critical knowledge and skill sets from seasoned leaders to emerging talents, thus preserving institutional memory essential for organizational sustainability.
Aligning with Long-Term Strategic Goals and Objectives: Succession planning aligns talent development with the organization's strategic objectives. By identifying and nurturing future leaders who can drive the company’s vision forward, succession planning supports the achievement of long-term success.
What does a successful succession planning process include?
A simple but highly effective method for any succession planning process involves these four stages of the succession planning cycle: Evaluate, Calibrate, Develop, and Review.
Evaluate
The first step includes identifying the roles and key positions that are critical to the organization’s success. These typically include leadership roles and specialized positions that require unique skills and knowledge. Once critical roles are identified, the next step is to assess potential internal candidates. This includes defining key inputs such as performance, potential, readiness, mobility, and aspiration. From there, senior leaders complete a worksheet on each of their direct reports using a science-based approach to place people into the 9-cell matrix. HR professionals meet with each leader and discuss their internal talent individually before the next step.
Calibrate
The next stage, and perhaps the most important, is talent calibration. During a typical 9-cell process, managers struggle to successfully differentiate between performance and potential, and they fail to truly identify key employees. This is often caused by unclear definitions of “potential” and an unwillingness to have tough discussions around talent and skill gaps to ensure proper cell placement. This leads to past performance becoming the proxy for future potential, and too many individuals being wrongly placed in the matrix with higher potential than they truly have. This hurts the individual and the organization, as employees are promoted into key roles or given stretch assignments for which they are not well-suited. Our approach to talent calibration encourages the group of leaders to gather for a facilitated discussion with the HR professionals and key stakeholders. The talent calibration session allows leaders to gain alignment on placements through the leadership chain by providing each leader with the opportunity to share their interpretation of other candidates’ performance and potential.
Develop
Next, individualized development plans are created and implemented. Development programs are tailored to prepare candidates for future roles or to align with your business strategy, and they should follow the 70-20-10 rule—targeting training, mentoring, and developmental assignments that build the necessary competencies and experiences. However, implementation is key. We recommend establishing metrics to track success, such as creating short-term goals to sustain a long-term focus.
Review
Succession plans are not static. They should be regularly reviewed and updated to reflect changes in the organization’s structure, strategy, and external environment. Reviewing regularly ensures the plan remains relevant and effective. It also supports leaders and holds them accountable for their development plans.
How do you plan for multiple leadership roles?
According to a recent Korn Ferry report, only 13% of skilled professionals are included in succession programs. Building a succession planning strategy isn't just about preparing for the CEO's retirement; it's about building a robust pipeline of leaders at all levels of the organization. Consider an organization that wants to increase diverse representation at the senior level. For qualified talent to become available, efforts must begin deeper in the organization. Thus, consideration of middle and frontline management can be helpful to include in effective succession planning.
Creating a Leadership Pipeline and Talent Pool: Organizations create a leadership pipeline by identifying high-potential employees early in their careers and providing them with opportunities for growth and development.
Providing Cross-Functional Development Opportunities: Multidisciplinary employee development opportunities are essential for broadening employees' skills and perspectives. Rotational assignments, cross-training, and project leadership roles help build versatile leaders who can navigate different areas of the organization.
Fostering a Culture of Leadership Development: A culture that values and prioritizes leadership development is crucial for successful succession planning. Organizations should encourage continuous learning, provide growth opportunities, and recognize and reward potential successors.
In conclusion, a well-executed succession planning process is not merely a reactive strategy to fill vacancies, but a proactive approach to ensure organizational resilience and sustained growth. By systematically identifying and developing top talent, organizations can mitigate disruptions during leadership transitions, retain their best employees, and foster a culture of continuous development and engagement. Moreover, effective succession planning aligns talent management initiatives with long-term strategic goals, ensuring that future leaders are equipped to drive the organization forward. Embracing a structured approach that includes evaluation, calibration, development, and ongoing review not only prepares individuals for leadership roles but also preserves institutional knowledge and promotes diversity in leadership.
As businesses navigate an increasingly dynamic environment, investing in succession planning is not just best practice but also a necessity for future success. View our succession planning template, or contact us today to learn how we can help you create a robust succession planning process tailored to your organization's unique needs.