The Importance of Succession Planning

Succession planning is an on-going dynamic process that identifies, assesses, and develops talent to insure that an organization can keep up with changes in the workplace and marketplace.  Succession planning focuses on these key areas:

Succession planning addresses the needs of the organization as senior management gets older.  Many leaders of organizations spent countless hours and years developing key components of the organization.  Unfortunately, the organization frequently fails to fully develop individuals that are prepared to move into leadership roles.  This is especially the case within small companies, which often times struggle to keep the doors open after a CEO or founder leaves the organization.  Family businesses are always at risk, and very few of them make it into the next generation.  Early planning removes that obstacle.

Succession planning prepares an organization for an unexpected, undesired event.  Who is prepared for the death or sudden illness of a key leader in the organization?  Key members of the leadership team are not immune to the sudden events that life sends their way.  They struggle with car accidents,  diseases, relationship issues and by other events that take them away from their roles within the organization.  These events cannot be predicted, but it is entirely possible to have a plan that highlights who is capable to take over if a key person is lost.

Succession planning ensures an organization has the right people in place today, as well as into the future. What more can be said?  While many organizations look at succession planning as a means to define who will take over the role of CEO or President, the reality is that all organizations should use this planning process to determine who has developed the capabilities and competencies to take over for a manager or supervisor within the organization.  It helps organizations measure the strength of their pool of talent and also understand where there are gaps in that talent.

Just for a minute, think about our military.  They have significant experience with succession planning as a tool to develop, maintain and even motivate talent.  They prepare for the possibility of losing a key person by assessing and understanding the strengths and weaknesses of each individual team member and by defining their roles and responsibilities.  When someone is lost, the leadership knows exactly who will take over.  They are always prepared.

Succession planning is a means to support the current culture.  Culture is so important to the stability and success of an organization.  An organization cannot afford to leave positions open when they lose key leaders.  It is not uncommon for it too take several months to even a year to fill key roles within an organization.  Employees need to feel comfortable and secure, but that can quickly change if a key position is not filled. 

Succession planning ultimately helps define business strategy into business and organizational goals. Companies regularly commit time and talent to developing their yearly strategic plans.  Unfortunately, these plans are too often focused on how the company can meet its financial goals through more production of products of services.  Rarely do these plans take a look at how people impact the strategic goals of the company.  Succession planning is an important part of the overall plan because it helps to define the types of high level skills that will be needed by the organization.  It is also clearly indicates how losing a key person will impact the financial picture of a company.  You figure it much does it cost your company when a key person leaves?  What does it cost to advertise for the position, to hire an executive search company to do the work, and to interview possible candidates?  What does it cost your business in terms of a drop in performance while the position remains open?  Are there other hidden costs? 

Are you ready to start a succession planning process in your business?  If the answer is yes, then you need to contact us today.