8 steps to successful succession planning

Succession planning is climbing the business agenda as leaders contemplate the accelerated future of work, evolving skills and the global talent shortage. No matter how big or small, without good people your organization will find it hard to achieve the performance needed to meet its business objectives. In this article, we outline 8 steps to succession planning you can use to systematically prepare for workforce continuity.

What is succession planning?

Succession planning is the process an organization uses to ensure every critical position is occupied by an employee with the right skills and experience. It aims to ensure workforce continuity by identifying and preparing suitable candidates for future roles, so that positions aren’t left vacant. Succession planning is also important for career pathing and employee engagement.

Organizations often focus on senior executives, but succession planning should take a broader ‘root and branch’ approach that promotes candidates through the ranks rather than relying on recruitment. This is particularly important today because many of the most in-demand skills are in short supply and expensive to acquire.

Why is succession planning important?

Aside from the business impact, there are wider market issues that make succession planning indispensable for every successful organization. Whether it’s an industry-specific skills shortage or the shrinking global talent pool caused by demographic shifts, succession planning is vital. Succession planning, a critical component of an organizational development plan, hinges on the premise that, if there are fewer suitable candidates on the open market, then organizations should focus instead on upskilling and promoting their key employees.

Also, it’s important to remember that when your most valuable or longest tenure employees leave the organization, they take with them many years of accumulated knowledge and practical experience. Having an effective succession planning can avoid this loss of intellectual capital by monitoring the readiness of succession candidates, so they can shadow incumbents before they leave their position.

What Is The Succession Planning Process?

The succession planning process is a strategic approach used by organizations to identify and develop future leaders within the company. It involves assessing current talent, determining key leadership positions that will become vacant in the future, and creating a plan to ensure a smooth transition of responsibilities. The succession planning process typically includes several steps: 

1. Identifying key positions: Determine which leadership roles are critical to the organization’s success and will require a successor in the future.

2. Assessing current talent: Evaluate current employees’ skills, abilities, and potential to determine their readiness for future leadership roles.

3. Developing a leadership pipeline: Create development programs and opportunities to groom high-potential employees for future leadership positions.

4. Creating a succession plan: Establish a detailed plan outlining the timeline, responsibilities, and resources needed for a successful transition.

5. Implementing the plan: Execute the succession plan by providing necessary training, mentoring, and support to prepare successors for their new roles.

6. Monitoring and evaluating progress: Continuously monitor the progress of the succession plan and make necessary adjustments to ensure its effectiveness. 

What are the 8 steps to succession planning?

So, in terms of HR and business operations, what talent risks does your organization face? What would your business do if a hard-to-replace member of a critical team suddenly left the organization? What impact would that have on your revenue, product development or customer success? Effective Succession planning is about making your organization resilient to such changes in the workforce.

The 8 steps we cover below can be grouped into four stages to bring clarity to the succession planning process. Firstly, you must set the scope for your succession plan. Secondly, you need to understand the pipeline of talent in your organization as it is today. Thirdly, in your leadership development strategy, identify potential successors and assign those employees that make suitable succession candidates. Finally, it’s fundamental to a successful succession plan that you uncover any gaps and take action to mitigate these.

Set the scope for succession planning

To begin with, you’ll need to decide which positions will be covered in the succession plan before mapping candidates to positions.

Step 1: Define positions that are in scope

• Start by identifying positions that are critical to business continuity, then list the skills, experience, attributes, and behaviors necessary for those positions.

• Systematically track competencies within the organization and map them to employees and positions.

• Monitor which employees already have the competencies you need and who is developing them.

Step 2: Review coverage of critical positions

• Prioritize positions in relation to business risk. Which positions take the longest to recruit for and have the longest time to productivity?

• ● In building your talent pipeline, you should also examine which positions, specifically, critical roles are at risk of becoming vacant in the near and medium term. Use risk mapping to assess the potential impact on the business.

Understand your talent pipeline

Before you assign employees as succession candidates, you’ll need to categorize them by their potential, distinguishing between those that are at the right level to move up now, those with potential to move up, and those with potential for senior leadership.

Step 3: Categorize employees by succession potential

• Create an ‘as-is’ people dataset based on each employee’s current stage of development. Review all positions and evaluate each position against the person currently occupying it.

• Identify which succession candidates are ready now, which will be ready with limited development, and which will need longer-term development.

• Use data visualizations to highlight the number of employees ready for the next level, those with potential for the next level, and those with potential for senior leadership.

Assign employees as succession candidates

Next, you’ll need to build an inventory of those positions that are currently without obvious succession candidates and look for employees with the potential to retrain.

Step 4: Identify succession candidates and record development priorities

• Revisit your ‘as-is’ people dataset (see step 3) and identify employees that don’t currently have a ‘succession status’ and map them to one or more critical positions that are the closest match.

• Determine development requirements for potential succession candidates and prioritize these.

Review succession plan to identify succession gaps and talent risks

Once you’ve mapped your succession candidates, review your succession plan to see where you have succession gaps and talent risks. For example, you may have too many candidates for some positions and some employees with potential that don’t have an obvious succession path.

Step 5: Review the overall succession status of positions

• Look at the overall proportion of positions with an immediately ready successor, the proportion of positions with succession gaps, and the number of positions with no succession status.

Step 6: Review the overall talent status

• Refer back to the mapping of candidates to positions (step 3) by identifying employees linked to too many positions and employees with no links to positions.

• Also, look for candidates that are ready now but there’s unlikely to be an opportunity to move up for some time.

Plan mitigation actions against succession risks

To avoid losing valuable talent due to lack of opportunity, you’ll need to take action to address gaps in your succession plan and support employees without a clearly defined career path.

Step 7: Identify succession gaps and plan mitigation actions

• For those positions with no identified succession candidate, consider development programs to offer cross-training to the most suitable candidates. In the event that no candidates come forward, you can fall back on external recruitment.

Step 8: Identify talent risks and plan mitigation actions

• Find those employees without a clear career path and develop a succession plan that offers opportunities to move laterally within the organization.

Succession planning best practices

It’s important to remember that your succession plan is only a model for workforce continuity, not a guarantee. Things may not work out as you expect but you can give your organization the best chance of success by building the following practices into your plan:

• Aim for broad coverage of the workforce, not just the top leadership positions
• Continuously maintain your plan to adjust for changes across the organization
• Be transparent about the completeness of your plan and the readiness of candidates
• Use a single process for all positions regardless of seniority
• Tie your plan to the organization’s performance management and talent development processes

Also, your plan should focus on attributes, aptitude and behavior of candidates when developing your succession plan. While people with the right skills and experience in critical positions is clearly important, this is not always the best starting point for a longer-term outlook.

And don’t forget that having accurate data behind your plan is what will make it workable. Your people data must be accurate, complete and at the least you should have the following foundational elements in place:

• Position: the critical positions across the organization that need a succession plan
• Incumbent: the employees occupying each critical position today
• Candidate: the names of individuals that have the potential to step into critical positions
• Readiness: the rating for each candidate for how ready they are to move up

Succession planning can unlock business potential but should be realistic

While succession planning is useful for mapping the potential of your employees, don’t overlook the fact that is fraught with risk and, done badly, could exacerbate the issues you’re hoping to address.

As with all analyses, you can add more and more complexity and refinement over time. But remember, improving the ‘accuracy’ of your succession plan will mean collecting more data, having more discussion, spending increasing effort and time. In the end, there always has to be a compromise between accuracy and practicality.

As executive coach Marshall Goldsmith says succinctly in his article 4 Tips for Efficient Succession Planning, succession plans “can lead to frustration if they aren’t realistic. Only give the promise of succession if there is a realistic chance of its happening.”

If you have any questions about the succession planning we’ve outlined in this article, please contact us to find out more about how Orgvue can help.

Read more:

– What are the benefits of succession planning?
– Succession Planning Examples – Learning from Industry Leaders

Read more about succession planning

Learn about the benefits of succession planning in protecting your business from threats such as the aging workforce, shrinking talent pool and intensified business competition.