Future-proofing your business: a checklist for succession planning

While the type and extent of succession planning may vary between different types of organizations, there is little doubt that it is the key to maintaining business stability and sustainability. But succession planning is not just for top executives. SHRM estimates the global turnover rate to be 19% annually. It therefore makes sense to include employees across all levels in the organization in the succession plan. When implemented as part of a broader talent management initiative, succession planning enables retention of existing employees as well as institutional knowledge to limit the impact of turnover. 

Succession planning is long-drawn process that could take anywhere between 12-36 months. Here’s a checklist to ensure an effective plan:

 

#1 Define a succession plan aligned with the big picture:

As a first step, businesses must revisit their company’s vision and mission statements to be absolutely sure they align with how the company wants to grow in the future. These statements act as the roadmap for leadership successors. It is therefore important to iron out gaps, if any.

To-doAs a prerequisite to developing a sound strategic succession plan, identify competency as well as organizational gaps across levels, and list future goals and challenges as clearly as possible. An emergency succession plan is also required since employees might suddenly take ill/meet with an accident; apply for an unplanned extended absence from work, and so on. This plan should be prepared by the incumbent executive and must carry visual representations of his/her workflow to allow potential successor(s) to get up to speed quickly.

 

#2 Create transparency and develop a talent roadmap:

Whether organizations are looking to hire externally or promote internally, communication is key to assuring existing employees of their growth trajectory. According to a Bridgespan Group survey, 30% of open C-suite positions in the non-profit sector were filled by an internal candidate, while the rate is 60% in the for-profits sector.The case of IBM’s first female CEO, Virginia M. Rometty’s succession is a perfect example of internal succession planning done right. Rometty who began her career as a systems engineer in IBM credits the company’s professional development initiatives which allowed her to succeed based on merit. 

To-do: Weekly, monthly and quarterly meetings with employees can help create transparency, pinpoint performance gaps, and set timelines for meeting training goals. Thereafter, it should be easy to create training courses and programs that can help address the gaps. Job shadowing is also a good way to train for succession.


#3Document extensively to preserve institutional knowledge:

Learnings related to industry best practices, consumer behavior, market trends or competitor offerings are key to competitive differentiation. Effectively capturing such learnings means organizations do not have to reinvent the wheel every time, helping them easily train potential successors to get job-ready quickly and efficiently.  The result: significant reduction in the learning curve for critical positions and the need for creating formal training programs.

To-do: Create a digital repository comprising strategic and operational plans, annual/quarterly calendars of business activities, marketing promotions, ROI sheets, etc. that act as reliable reference points for succession planning and training.

   

Use succession planning to win and retain talent

Businesses without a strong leadership development program risk losing valuable talent and are likely to experience difficulties in attracting top-notch talent. Focusing on training and developing high potential successors farther down the line is crucial to maintaining a robust pipeline of internal talent. At the end of the day, the goal of succession planning is to strengthen the talent bench and ensure the long-term growth and stability of a company. The right way to approach succession planning is to view it as an ongoing strategy that ensures employee development and engagement, but one that must be constantly refined to suit changing business needs.  

 

Sources:

https://www.shrm.org/hr-today/trends-and-forecasting/research-and-surveys/Documents/2016-Human-Capital-Report.pdf

https://www.cnm.org/CNMMembership/Links/Blog/February-2016/The-Importance-of-Succession-Planning

https://www.wsj.com/articles/SB10001424052702304665904576381493522796796

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