6 Important Ways to do Succession Planning Strategy (Guide)

Introduction to succession planning strategy

Succession planning strategy is tricky. It is the art of finding a right fit for a future empty position. The reason succession planning strategy is tricky is that it makes an HR dig through everyone in the company and choose the right fit. The second reason for which succession planning strategy is tricky is if the HR team fails to choose the right person without realizing it, it would affect the company hugely in the long run. People don’t realize until it’s too late. But if a company has an on-going succession planning for the organization’s top positions, it would become easier for HR team to make the right choice without going into much detail at the last moment and there would be less chance of making a mistake in choosing the candidate for future replacement.

In this guide, we will be talking about “succession planning strategy”, why succession planning is important, the possible benefits you can get out of succession planning strategy, how to do succession planning (step by step procedure) and finally how you can integrate succession planning strategy into your HR strategy. We have a lot to discuss and if you hang on, you would get one or more ideas to implement in your business or company.

Let’s get started right away.

What is succession planning strategy?

Succession planning is the art of strategically looking for the right fit especially for the position of a senior management professional. Companies which start their succession planning strategy just prior to the requirement, increase their chances of failure as succession planning process should be a continuous event to be effective. If companies start to do succession planning strategy as a process of putting HR strategy in place which we will discuss in the later section, succession planning process would be successful beyond measure.

Whenever the HR team sits with the process of doing succession planning strategy, what they do is to choose someone whose experience, qualification and ambition match the criteria for the senior management post. Moreover, the person (who would be chosen for the position to fill in near future) should be so imperative for the company that the company can’t afford to lose him/her in near future. succession planning strategy is an art and science. And it has a lot to do with the perpetuity of an organization.

Let’s understand with an example. B is about to retire from a senior position in company A. The HR team is looking out for people within the organization to fill up the position in near future. They find C to be the exact match for the position in experience, knowledge, qualification, and dedication. Thus C is being chosen as a successor of B. Thus when B will retire from company A, C will take his position. The whole process is called succession planning strategy.

Why is succession planning strategy important?

succession planning process is one of the most significant HR strategies in an organization because it ensures the perpetuity of the organization and helps the organization becomes dynamic and versatile in its approach to deal with change.

There are few things for which you should consider doing succession planning process.

• Risk of loss: The first thing is the opportunity cost. No talent will stay in your organization if you (HR/CEO/Founder) don’t help him/her grow in the long run. What would his/her competitive advantage if s/he will stay in the same position for years even after having the desired qualification and attributes to be successful as a leader? In that case, if another company offers him/her for a better opportunity, s/he will leave the organization for better prospects. So, you need to always on a look-out for people who are able and difficult to find in the marketplace because losing them would be the greatest loss for the organization. An effective succession planning process helps mitigate the risk of losing efficient people and facilitates in retaining and effectively understanding their position and ambition.

• Prevention from being stalled: If the HR team do the planning just prior to retirement of the person, it would be difficult for the organization to get going at the same pace. The HR team needs to maintain a log of each person, especially the top management to help organization cope up with challenges. succession planning process should be done every year, consecutively and always with or without the need of replacement. What if a senior executive expires today, what would HR team do? How would it affect the organization? If the organization does the succession planning process on a regular pace, they would know who will replace whom during a setback or a crisis period.

• Building leaders:

  It is important for a company to grow and expand at a level where no-one needs to be given instruction to be able to do the needful. Thus with a proper succession planning process, companies are able to convince the top management to train, develop and make the subordinates future ready. If the succession planning methods are done at a later stage, the chances of training and sensitivity program or conducting management development programs (MDP) are pretty low. So a company with an effective succession planning systems concentrates on building leaders since a talent joins the company. And it makes a huge difference.

• Identify the performance gaps: An effective succession planning methods helps HR and the top management to find the gaps in the performance. To reach excellence, every company sets its own benchmark. And people who work in that company are expected to reach or reach toward the benchmark. A succession planning methods help identify people who reach the level and who don’t and why there the gap between the reality and expectation differ in terms of performance. Is it not being able to create a knowledge management system within the organization? Is it something more of an individualistic approach than a holistic issue? Is it something organization can find a solution for immediately? How not being able to achieve the benchmark would affect the company in the long run? succession planning methods help answer these questions and facilitate in finding answers.

Possible benefits of an effective succession planning strategy

In a recent study, it was seen that 90% of the correspondents who are running companies agreed that an effective succession planning methods has been an essential part of being successful. However, only 50% of them took action and did something about succession planning. Thus, we want to emphasize it more. Let’s see the benefits you would get if you take succession planning methods sincerely.

• Succession planning helps to retain better talent and let go of talent who are not worth keeping.
• It helps build the right leadership for the company in the years to come.
• Succession planning is a comprehensive planning which saves the company from any contingencies that may appear in the future.
• It connects the whole organization in a single thread which is the perpetuity of the company.
• Succession planning encourages the organizations to invest heavily in training and development to ensure better ROI and lower attrition rate.
• Succession planning also helps shape the overall strategy of Human Resources in the company.

How to do succession planning strategy (step by step procedure)

(Image source: Goggle )

Succession planning is a significant part of HR strategy. Now as HR is treated as more important than any other resources in an organization, it is important than the succession planning systems should be done in alignment with the HR strategy.

Every organization wants to expand or remain same and increase profits in the long run. Thus they need people to run the business. So, today you need to think about how you will remain in the competition for the next 10-20 years. A strategy will help you see through the fog of so many variable components like attrition rate, economic crash, inflation/deflation, entry of new competition, the emergence of new substitute or increased rivalry. You need to do the succession planning in such a way that even if things go wrong, instead of being stuck; you can move ahead and take action immediately. To be able to align your succession planning with the HR strategy, you need to have a contingency plan and a feedback loop. The contingency plan will help you fall on a plan if things don’t go as planned. And the feedback loop should be continuous so that even if actions taken in the beginning don’t yield expected results, you can course correct and adjust your direction.

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To be able to that you need to create a succession planning that is thought upon and worked upon every year since the inception of HR department in the organization.

In the final analysis

Succession planning is not a one day job. To be able to make it effective, you need to plan ahead and do the things as you go and expand the horizon of the organization. Not doing succession planning from the beginning is a huge risk because if the leadership is not full proof, then it would not be possible for any organization to first exist and then to survive. Thus use this guide to create a definitive succession planning systems and create proper control mechanism to fill the gaps between what is actually done and what is expected.

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