Succession planning is critical to the success of companies of all sizes. Why? Because as much as you might want to retain all your top staff, circumstances change. They may move on, retire or you may ask them to leave. Without a succession plan in place, you’ll be faced with a key role being vacant, possibly for months, which could have an impact, not just on your bottom line, but also on staff morale.
But like many things in business, a succession plan is only as good as the work you put into it. Throw something together in a rush and it’s unlikely to be fit for purpose. Take your time, and you’ll have something which ensures your business continues to run smoothly even if someone leaves completely unexpected.
We take a look at why succession planning strategies are so important and how you can ensure they remain robust and relevant.
What is a succession planning strategy?
Succession planning is about accepting that employees in critical roles within your organisation will leave and their positions will need to be filled as quickly and efficiently as possible. It’s about identifying and developing potential leaders and managers within your company so that they have the necessary skills and experience to fill business-critical roles when the time comes.
Some organisations only look at the top leadership roles such as CEO, CFO, CTO, but a successful succession planning strategy doesn’t just focus on your leadership team, but on all major roles at all levels across your company.
Succession planning isn’t about pre-selecting people for specific roles. On the contrary it’s about putting the preparation in place so you can select the right person at the right time. In some cases, you may realise there is nobody within your company who would be suitable, in which case, it’s worth hiring an executive search agency to start engaging early on with potential candidates.
What are the benefits of having a succession plan?
As well as ensuring your business can continue to run smoothly when a key member of staff leaves, a robust succession planning strategy delivers a number of other business benefits.
- You’ll save time and money as you will be able to fill the roles quickly
- It will help you identify and address any skill gaps in your business
- Creating learning and development opportunities for employees will improve employee engagement as they will feel more valued
- You’ll increase the pool of potential candidates you have to choose from
- It will help ensure you retain internal company knowledge and expertise
- Preparing internal candidates for future roles means you won’t have to compete with other companies.
And a succession plan will also help position you as a good company to work for which could be critical given that by 2030 there could be a global talent shortage of more than 85 million.
Key questions to ask about your succession planning strategy
All succession planning strategies should be robust and relevant, so we suggest you ask the following questions about any plans you have in place.
Are you in danger of replacing like for like?
In some ways replacing a role with someone with a similar profile makes absolute sense, especially if their predecessor has done a good job. But succession planning should be about the future, the changing climate, and any business challenges this brings. Chances are these challenges will be very different from what has happened so far and will potentially require a different set of leadership skills.
To ensure you don’t replace like for like, think about what business challenges your sector and business could face and then map them against the skills required to deal with them.
Is your succession planning diverse?
Another major problem of just replacing like for like is there is the real risk your succession planning won’t be diverse, and this is often compounded by unconscious bias, focusing on specific candidates, rather than focusing on the skill set and experience required, and the senior leadership team failing to take ownership for supporting inclusion. It’s one of the reasons why you shouldn’t limit succession plans to internal talent but also look externally.
But remember to use an agency who values inclusion. At HorrexCole, we understand how diversity benefits the whole organisation through encouraging higher levels of creativity and performance and offering a stronger sense of belonging and engagement.
It’s why we support our clients to address their diversity challenges by offering an inclusive approach coupled with market intelligence and data-driven results.
Are you realistic about who you will attract?
Equality and diversity are important, but you also need to be realistic about who you can attract to your sector, company, and job role.
Technology, manufacturing and automotive are just some of the sectors where women are under-represented with just 5% of leadership roles in the technology sector held by women.
This is down to a myriad of reasons including women not being provided with enough information about working in a particular sector, a lack of female role models and a perception that some sectors are simply too male-dominated.
Another factor is lack of experience. It’s only been in the last 10 years women have started to break the glass ceiling, so they are still lagging behind in terms of experience and some may not be ready for senior leadership roles.
Remember, recruitment should never be a box ticking exercise, so while you should strive for diversity, be aware that, at least in the short-term, it may not be achievable.
Is your succession plan updated regularly?
As the last couple of years have shown us, circumstances can change quickly so succession planning should never be a one-off process as it needs to accurately reflect what’s going on in the external business environment as well as any changes in your own company.
Does your succession plan recognise that your future leadership team will need a different skill set? Have you factored in the impact of a potential talent shortage? And with research showing almost half of senior decision makers have made a bad hire in the past 12 months, have you put plans in place to mitigate against this risk?
Scheduling set times in the year to discuss and review your succession plan is a good way of ensuring it remains both robust and relevant.
The key to successful succession planning is to be proactive so that you are prepared for any eventuality, and if the last couple of years have shown us anything, it’s that the unexpected does happen.
If you need any advice about finding the right external candidates for your succession planning strategy, please get in touch.