October 20, 2020

The Future Is Now: 7 Steps to Initiating a Company-Wide Succession Plan

Enduring businesses understand the importance of planning for the future. One of the key aspects of any forward-looking strategy is a succession plan to ensure a steady pipeline of qualified successors ready to fill positions when essential personnel leave.

The important thing to remember about succession planning is that it is a proactive HR strategy that has to be in place before role vacancies create a sense of urgency for filling positions. “When a sudden leadership void is experienced, it makes no sense to then start the development process,” writes David V. Day, Ph.D., for the Society for Human Resource Management. “It is too late, because proper development can take months or even years.”

That’s why chief human resources officers must start developing a succession planning strategy now. Here are seven key steps to initiating a company-wide succession plan.

1. Evaluate the Company’s Vision and Plans for Growth

“Succession planning is a process, not an event,” write business advisors Nick Di Loreto and Omar Romman at Harvard Business Review. It’s a labor-intensive, never-ending process that requires a commitment from company leadership.

And it starts with their vision of the future.

Every organization should have a plan for growth or sustainability. If your organization doesn’t have a formal, written business plan in place that paints a picture of the future, it’s time to gather leaders together to discuss where they see the company in the short term and the long term.

That information is crucial because a succession plan has to work within that vision. By keeping it aligned with the business plan, CHROs ensure the succession plan integrates into and supports the company’s strategy for growth.

2. Identify Key Positions for Succession Planning

The next step in succession planning is to identify the positions that are integral to your company’s success. These are the positions which, if left vacant, would negatively impact the security and future growth of the company.

While starting at the top with the C-suite or upper management is the obvious choice to get going, CHROs must consider all positions throughout the entire company for successors. Some key employees may be playing more supportive roles, but those roles are nonetheless essential to the company.

“It’s important to take an enterprise-wide approach and look for lynchpin roles at other levels as well,” according to the team at leadership assessment and coaching service company Sigma. The company encourages using four criteria to identify which positions are critical:

  • The position’s impact on business operations.
  • How difficult it would be to find external candidates for a position.
  • The depth of talent available internally to fill a position.
  • Role-specific skills or knowledge needed to perform in the position.

Not every position needs to be planned for, but these criteria might lead you to some surprising positions that are deemed critical. That’s why it’s important to take the time at the beginning of the planning process to do an exhaustive identification.

small toy men, one stands out; succession plan concept

3. Find the Right People for the Job

Once you know the positions you need to plan for, it’s time to seek out the right people to fill them in the future. To do this, says Colleen O’Neill, senior partner at Korn Ferry, pool together the right people across departments and businesses units to answer questions that include:

  • Who is critical to the organization?
  • Who would you appoint as your understudy?
  • How do we get that person ready to assume the role?

Take that cross-functional input to determine the right people to train and mentor to eventually move into key positions, or to determine which positions will require an external hire. If hiring from within, evaluate each candidate against the demands of the position.

The team at Deloitte advises developing a template against which to evaluate each candidate. That profile should include job-related facts, informed predictions of future behavior, and subjective assessments. This will help you determine the best person at the company for each position in the succession plan.

Once you know who those people are, gauge their interest level in filling those roles.

4. Discuss the Plan with Employees

In order for a succession plan to achieve its goals, employees need to know they are being targeted for important positions. While there are some dissenting opinions on this subject, most professionals agree that employees should be made aware of the plans and shown a career path to achieve that end.

Doing so builds trust and motivates employees to do their best. “Having an open dialogue about development opportunities and career paths also ensures that leaders aren’t unknowingly forcing top performers down paths they don’t want to go,” says Marie LaMarche, division director of labor relations at CHI Franciscan Health.

Before locking in any names, CHROs should take the time to discuss career plans with those employees and identify those who are not only willing to advance, but also open to developing new skill sets. The best way to do this is to call these workers in for one-on-one meetings to explain the situation and the opportunities it presents.

5. Offer Opportunities for Professional Development

Whether the move would be lateral or vertical for the successor, that person will need to develop the skills needed to take on a new position in the company. It falls to the company to ensure those candidates have opportunities for professional development. “Grooming successors matters not just to facilitate seamless transitions but to make it more likely that everyone in the organization will succeed,” writes Margaret Heffernan, mentor at leadership training company Merryck & Co.

This is one of the more difficult steps to accomplish for many companies because leaders are so focused on the tasks at hand that they struggle to invest time and energy on future-track plans. A change in thinking can help put the spotlight on this important part of succession planning.

Embarking on this step in the succession-planning process requires a mindset that views the investment in training and mentoring as a development process rather than a replacement process, Todd Hoffman and Stanley Womack write in a PwC paper on succession planning.

“When critical openings occur, these companies are ready to fill the positions with skilled, experienced internal candidates because they have planned for such a transition – by ensuring that the individuals selected have been exposed to the proper training and career development opportunities,” they explain.

These opportunities could include mentoring, skill-specific training, shadowing, collaborating, and any other knowledge-sharing tactics that broaden the experience of future leaders.

an older worker mentors a young worker at a laptop; succession plan concept

6. Engage Leadership in the Process

While succession planning may be a function of human resources, it is a company-wide endeavor that should involve managers and leaders at all levels of the company. “Cultivating high-level commitment and support will have a positive influence on the succession-planning program,” according to SHRM. That influence can ensure buy-in across the company and steer the organization toward a culture of learning that encourages knowledge transfer in preparation for the future.

Those leaders can also be used to connect with potential successors and engage them in conversations about their career paths and personal development. These talks can give employees visibility about career development and insights into what may be expected of them in the future. It’s a positive trust-building strategy that can lead to more fruitful discussions about the specific role an employee will play in the succession plan.

7. Give the Plan a Trial Run

Even the best-laid plans have flaws. To get ahead of any potential unwanted surprises in your succession plan, conduct a trial run. If someone in one of the positions identified in the plan takes a vacation, for example, have their potential successor assume some of their responsibilities while they’re away.

Not only will the candidate for succession gain valuable experience and insights into what their role will be in the future, but it also gives HR and department managers an opportunity to assess their performance. That information can be used to identify professional development needs.

Succession planning requires an investment of time and energy. They are resources well spent because businesses that don’t have these plans in place are jeopardizing their futures. It may seem overwhelming to pull together such a forward-thinking plan that will no doubt constantly evolve. But if you take it one step at a time, you will be able to climb the succession-planning mountain and ensure some long-term stability in your organization.

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