Succession Planning

What is succession planning:

Succession planning is a process whereby an organization ensures that employees are recruited and developed to fill each key role within the company. Through your succession planning process, you recruit superior employees, develop their knowledge, skills, and abilities, and prepare them for advancement or promotion into ever more challenging roles.

Need for Success Planning:

1. Improved job filling for key positions.
2. Active development of “potential candidates”.
3. Auditing the ‘talent pool’ of the organization.
4. Fostering a corporate culture.

Typical activities covered by succession planning:

1. Determine what roles and skills are critical for the growth of the company
2. Identify and understand the developmental needs of employees to fill those positions
3. Identifying people who could potentially fill and perform highly in such roles.
4. Developing the required capabilities in those people through a program of learning experiences planned collaboratively by the organization

Models of Succession Planning:

There are three main models that companies use to implement succession planning:

1. Short-term planning or emergency replacements
2. Long-term planning or managing talent
3. Combination of above plans

Organizations should take a close look at their goals and levels of commitment before choosing a model that best suits their needs.

1    Short-term or emergency replacements-

This is the most common model of succession planning and serves as a crucial point for all types of businesses. Short-term replacement planning is focused on an urgent need caused by a sudden development within the organization –skilled employee leaving the company, expansion or contraction of business. Sometimes, emergency replacement planning must work to retain knowledge that is about to be lost. Emergency knowledge retention is an option to consider if the organization is about to lose specialized knowledge and does not have a successor to take the knowledge.

Emergency succession planning can come into play any time the organization expands in a new direction or discovers the talent gaps to fill the required managerial position. Generally, human resources will try to fill the role from within the organization, but often go outside, if no one has been trained for the job in the organization.

 Long-term planning or managing talent-

Talent management focuses on the future needs of the organization. Working within the strategic framework for the company’s future goals, senior management identifies the positions necessary for growth and the best candidates to fill those roles. Some organizations invite all employees to take part in an assessment process, while others have managers identify leadership candidates.

If companies wish to grow leaders from within their existing talent pool and have the time and resources to develop a useful program, effective talent management will become a key component of its long-term human capital strategy.

The advantages of this model include:

• Identifies a specialized talent pool
• Defines and builds future skills required for the success of the organization
• Motivates and retains employees by involvement in their career growth

Some of the disadvantages of this type of model include:

• Expensive and time consuming
• Existing employee-base may not have required skills and experience for key posts and outside hiring can lead to resentment
• Managers may be frustrated by not being allowed to choose a successor

3.      Combination of both the plans-

This model allows senior management to plan for the long-term growth of both the organization and employees within the organization and prepare for emergency replacements to ensure that business is not affected by knowledge loss or lack of skilled employees.

HR professionals will find that the advantages of succession planning greatly outweigh the disadvantages, which can be overcome by proper planning and communication within the employees and senior management.

         Advantages of Succession Planning:

Prepares current employees to undertake key roles.

Reduces the Need to Recruit Externally.

Improves employee commitment and therefore retention.

Meets the career development requirements of existing employees.

Develops a strategic Leadership Human Resource Plan.

Builds relationships with and carefully study the performance and behavior of successors over a long period of time.

Disadvantages of succession planning:

1. Narrow Focus

Succession planning allows leaders to focus on potential new managers who are employed by the organization but does not allow for candidates outside the company. In many cases, managers will consider only their direct reports as potential successors. This is good in terms of  career development for those inside the organization, but it does not necessarily meet the company´s best interests. In some situations, it is better to replace a manager with an external candidate to bring new skills to the team. Other times, there simply may not be a suitable candidate within the organization.

2. Effects on Motivation

It is not always totally clear cut whom a manager should prime for future leadership. In some cases, there may be two or more strong candidates for the role. If leaders do not handle succession planning carefully and objectively, others may see the person being trained for leadership as favored. This can lead to motivated individuals losing interest and not trying as hard in the work place. It may have the effect of making those employees think it is not worth their effort if there are no progression possibilities. Managers need to carry out succession planning carefully to avoid motivational issues.

3. Family Rivalries

In small, family-run businesses, succession is an issue that is very important. It the head of the organization dies, a child will replace that person in many situations. If the parent favors one child over another and if this is not considered to be fair, it can have a catastrophic effect on the small company. Family rivalries can cause a business to fall apart if not addressed effectively.

4. Organizational Structure Changes

Succession planning sometimes takes place even though an organization's structure may not be completely stable. Leaders need to develop and change organizations so they can survive to meet new business challenges. Sometimes a person may be developed for a role in the organization that may not exist in the future. This can have a negative impact on motivation of the earmarked individual. In addition to this, training costs money. If the company's leadership later eliminates the position, it will have wasted resources developing a person for a role that no longer is needed.

Tips for successful succession planning:

 1. Build Open Relationships – hold regular informal conversations with your people to get to know them well. Often you will find hidden gems.

2. Have a Vision of the Future – work on understanding exactly who you need to get the outcomes that you need into the future. Be strong with your thinking.

3. Desktop Thinking – spend time reviewing your people right now and the potential candidates who can be developed for the future, even if they are not ready yet.

4. Identify Potential – from knowing your people better, you can ascertain who has within them the skills and capabilities you can grow for your succession plan.

5. Involve Your People – talking to your key people will ensure that you understand better the possibilities in others from a variety of perspectives too.

6. Communicate – hear what your people have to say and help them see the future possibilities too for them, whilst being careful to manage expectations appropriately.

7. Use Development Tools – help your people develop rapidly with a variety of experiences that will accelerate their growth to meet their and your short- and long-term needs.

8. Engage and Challenge – your people will need encouragement and help to recognize who they could be – and they will also need a nudge or two of encouragement, if they are a bit reluctant.

9. Give Them Fun – by switching employees on to their future possibilities, they will perform much better in the short-term too as they engage, enthuse and enjoy their work.

10. Review – your plans will need occasional review as situations change – and that’s vital.

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