What is Succession Planning?

As business leaders contemplate the changing nature of work and what the post-pandemic future might hold, succession planning is at the top of the agenda.

Succession planning is the process of identifying future leaders within your organization and nurturing their development so that they are ready to step in and replace old leaders as they retire or leave for new roles. It can also be used to ensure that every critical position is filled by an employee who has the right skills and experience.

Creating an effective succession plan requires organizational leaders to anticipate the future needs of the business and figure out a way of ensuring that the right talent is available internally and will be ready to step into a new role, potentially at a managerial or leadership level, when needed.


Why is Succession Planning Important?

No matter how large or small an organization is, without the right people ready to fill the right roles, it will struggle to meet its business objectives.

Whether it’s overcoming a skills shortage specific to a particular industry (i.e., cybersecurity) or dealing with the effects of the dwindling global talent pool, succession planning is an indispensable tool for any successful organization.

It’s also important to remember that when a tenured employee leaves an organization, they take all their knowledge, skills, and experience with them. While this will always mean the organization takes a hit, having a succession plan in place mitigates the impact and guarantees that somebody with similar capabilities can step in.

Leaders know this, too. According to research by Deloitte, 86 percent of organizational leaders surveyed believe that succession planning is an “urgent” or “important’ propriety. Despite this, only 14 percent believe that they do it well.


5 Tips for Building a Successful Succession Plan

Succession planning isn’t as simple as casually earmarking a few people as potential backups for key roles; there’s a whole lot more to it. As with anything, the more carefully and thoughtfully you build a succession plan, the more effective it will be.

Here are five tips for building a succession plan that works for your organization:


1. Define the Scope

To begin with, you will need to set the scope for succession planning and decide which positions will be included in it. This helps you match up the right employees with the right roles later in the planning process.

Start by identifying positions that are business-critical, i.e., those that are at the core of your operations without which they couldn’t operate. These should be organized relative to things like business risk, estimated time until they become vacant, and other factors such as the length of recruitment, training, and any vetting processes.

Once you have these roles pinned down, consider hard requirements like overall experience, training level, skills, and personal attributes and behaviors that are necessary to be successful in these roles.  


2. Know Your Talent

You need to know your employees and wider talent pool before you begin assigning people to different roles as succession candidates.

Once you do, start categorizing people according to their experience, skills, and potential for the roles in question. Distinguish between people who are ready to move up when required (i.e., immediately should a vacancy arise) and those who might have leadership potential in the long-term with further training and development.

At the same time, review all the business-critical positions you have identified and evaluate each employee with current and future leadership potential against the people currently occupying them.


3. Identify Training Opportunities

It may well be the case that there’s a role or two within your organization that doesn’t have a suitable or obvious successor. If this is the case, you’ll need to look for opportunities to train or retrain employees who have been identified as future leadership potential but haven’t been matched with a suitable role.

Revisit the previous step and identify any employees that don’t currently have a “succession status” — i.e., those that have not been identified as a successor to an employee in an existing role — and map them to the closest best match position that doesn’t have a successor in place.

You may also wish to provide training and development opportunities to employees who aren’t yet ready to be succession candidates but seem to have untapped potential.


4. Regularly Review and Plan

Once you have finished mapping succession candidates for all your critical roles, review the succession plan to make sure you have not left any gaps. Also, check to make sure that you have not identified too many candidates for a single position and that you have not left any promising employees without a provisional succession path.

It’s a good idea to regularly return to the succession plan as time goes by and check the overall proportion of positions with successors who are immediately ready and in place, those with succession gaps (i.e., where an employee has been identified but needs further development), and no succession status because things will naturally change over time.

Where succession gaps exist, take action to address these internally first by using your existing talent pool and supporting employees who are willing to develop. This will avoid employees leaving the organization due to a lack of opportunity. Only turn to external recruitment where there are absolutely no suitable internal candidates available.


5. Use Your Org Chart

Most organizations use some sort of tool to manage succession planning. There’s no need to invest in dedicated succession planning software, however. In most cases, organizations can use their existing organizational charts for this purpose.

An up-to-date and current organizational chart — i.e., one that has been built using a dedicated org chart builder like Organimi rather than a static one built using Microsoft Word — is a very powerful tool that can be used as a visual aid for succession planning. This is because the organizational chart shows you real-time information that can be used for making strategic personnel planning decisions like role succession.

If you use organizational chart software that integrates with your HR management system, for example, you will be able to tap into its data at any time and use it to prepare your succession plan.