What is a Succession Planning Strategy?
The succession planning strategy identifies and develops employees with the potential to fill key leadership positions within an organization. Succession planning aims to ensure that a company has a pool of competent employees who can seamlessly take over critical roles when the need arises.
A succession planning strategy typically involves:
- Assessing the skills, abilities, and potential of employees.
- Creating development plans to enhance their skills and knowledge.
- Providing them with opportunities to gain experience and exposure to different aspects of the business.
Succession planning is the art of strategically looking for the right fit, especially for the position of a senior management professional. If companies start to do succession planning as a process of putting HR strategy in place, the succession planning process would be successful beyond measure. Companies that begin their succession planning just before the requirement increase their chances of failure as the succession planning process should be a continuous event to be effective.
Whenever the HR team is doing a succession planning strategy, they choose someone whose experience, qualifications, and ambition match the criteria for the senior management post. Moreover, the person (selected for the position to fill shortly) should be so imperative for the company that it can’t afford to lose them soon. The succession planning strategy is an art and science. And it has a lot to do with the perpetuity of an organization.
Introduction to Succession Planning Strategy
The succession planning strategy is tricky. It is the art of finding the right fit for a future empty position. The succession planning process is tough because it makes an HR dig through everyone in the company and chooses the right fit. The second reason why it is tricky is that if the HR team fails to select the right person without realizing it, it will affect the company hugely in the long run.
People don’t realize until it’s too late. But if a company has ongoing succession planning for its top positions, it would become easier for the HR team to make the right choice without going into much detail at the last moment. 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, 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 will get one or more ideas to implement in your business or company.
Let’s get started right away.
Why is the Succession Planning Strategy Important?
Succession planning is one of the most effective HR strategies in an organization because it ensures the perpetuity of the organization and helps the organization become dynamic and versatile in its approach to change.
There are a few things for which you should consider doing the succession planning process.
1. 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 them grow in the long run. What would their competitive advantage be if they stayed in the same position for years even after having the expected qualification and attributes to be successful as a leader? In that case, if another company offers them a better opportunity, s/he will leave the organization for better prospects. So, you need to always be on the lookout 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 retaining and effectively understanding their position and ambition.
2. Prevention of Being Stalled
If the HR team does the planning just before the person’s retirement, it would be difficult for the organization to get going at the same pace. The HR team must maintain a log of each person, especially the top management, to help the organization cope with challenges. The succession planning process should be done every year, consecutively, and always with or without the need for replacement. What if a senior executive expires today? What would the HR team do? How would it affect the organization? If the organization regularly plans succession, they would know who will replace those during a setback or crisis.
3. Building Leaders
A company needs to grow and expand at a level where no one needs instructions to be able to do the needful. Thus, with a proper succession planning process, companies can convince top management to train, develop, and prepare the subordinate’s future. If the succession planning methods occur later, the chances of training and sensitivity programs or conducting management development programs (MDP) are low. So a company with an effective succession planning system concentrates on building leaders since a talent joins the company. And it makes a huge difference.
4. Identify Performance Gaps
An effective succession planning method helps HR and the top management find performance gaps. To reach excellence, every company sets its benchmark. And people who work in that company are expected to reach or reach the standard. Succession planning methods help identify people who achieve the level and who don’t and why the gap between reality and expectation differ in performance.
Is it not able to create a knowledge management system within the organization? Whether it is something more of an individualistic approach than a holistic issue? Is it something an organization can find a solution for immediately? How would not achieving the benchmark affect the company in the long run? Succession planning methods help answer these questions and facilitate finding answers.
In a recent study, 90% of the correspondents running companies agreed that effective succession planning methods had been an essential part of success. 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 retain better talent and let go of talent not worth keeping.
- It helps build the right leadership for the company in the coming years.
- Succession planning is comprehensive planning which saves the company from any contingencies that may appear in the future.
- It connects the whole organization in a single thread: the company’s perpetuity.
- Succession planning encourages organizations to invest heavily in training and development to ensure a better ROI ratio and lower attrition rates.
- Succession planning also helps shape the company’s overall strategy for Human Resources.
There are exactly six steps by which you can create a great succession planning system for the organization’s future.
Let’s look at all these six steps one by one.
1. Identify Key Positions
The first step is, of course, to identify which positions you need to keep in mind. These are the key positions critical to organizational success. The better you identify key parts, the better the chances of the right succession planning systems. To create effective succession planning methods, all you need to do is look at all the positions and determine the impact of each position in 5-10 years. Then, decide which jobs have the most impact; identify them as key positions.
2. Review Requirements
Once you find out key positions, you need to review the criteria and see the most crucial elements of the organization. You also need to identify key actions the people are taking daily, which is not part of the job description and job specification. Then you need to make a list of requirements required to be eligible for enrollment in this succession planning program.
3. Analyse Gaps
Succession planning is necessary to analyze and fill the performance and expectation gaps the organization is currently facing or expecting to face in the near future. The HR team needs to realize which key positions are about to create gaps in the organization’s performance level and then take suitable actions to find a solution.
4. Develop A Plan
Based on all the analysis, it’s time to make a plan. You need to write everything down, and you also need to make sure that whatever criteria or key-result-areas you set are relevant to the strategic perspective of the organization. Set a vision. Then make a step-by-step process to reach now. Yes, you don’t need to go from where you are; you need to start from the end to get the most effective results.
5. Implement Succession Strategies
Once the planning is all set, it’s time to implement what you have planned. Start from the end. And take action now. If you do that, the organization’s strategy will always be relevant. Because today whatever activity you are taking will reap benefits for your future! Find out key people, and if the succession is necessary shortly, let them know beforehand so that they get time to prepare.
If the succession can occur after some time and you have 3-5 years to implement the plan (which is advisable), then train the potential candidates and see how they express themselves in the simulated environment. Succession planning and implementation are partly strategic planning and partly gut instinct. Rely on both and then go to the next step.
6. Monitor and Control
Without control, no plan can be successful. Thus you need to see whether the actions get implemented as per the planning. If yes, you need to go ahead and take the next step. If not, then you need to prepare for course correction.
Integrating Succession Planning Strategy into HR Strategy
Succession planning is a significant part of HR management strategy. As HR is more important than any other resource in an organization, the succession planning systems must align with the HR strategy.
Organizations want to expand or remain the same and increase profits in the long run. Thus they need people to run the business. So, today you need to consider how you will remain in the competition for the next 10-20 years. A strategy will help you see through the fog of many variable components like attrition rate, economic crash, inflation/deflation, entry of new competition, the emergence of new substitutes, or increased rivalry.
You need to do succession planning so that even if things go wrong, instead of being stuck; move ahead and take action immediately. You need a contingency plan and a feedback loop to align your succession planning with the HR strategy. The contingency plan will help you fall on a schedule if things don’t go as planned. And the feedback loop should be continuous so that even if actions taken initially don’t yield the expected results, you can course-correct and adjust your direction.
To be able to do that, you need to create a succession planning that is thought upon and worked upon every year since the inception of the HR department in the organization.
Succession planning is not a one-day job. To make it effective, you must plan ahead, do things as you go, and expand the organization’s horizon. Not doing succession planning from the beginning is a huge risk because if the leadership is not foolproof, it would be impossible for any organization to survive. Thus use this guide to create definitive succession planning systems and proper control mechanisms to fill the gaps between expectations and reality.
This article has guided the Succession planning strategy. It is the art of strategically looking for the right fit, especially for the position of senior management professional. These are the following links related to succession planning strategies.