Company succession planning: it's a winning business strategy that keeps your business future-proof. It helps your company plan for expected and unexpected turnover in all key roles throughout the company—not just leadership roles—while training and developing employees for future roles.
But succession planning isn't just a win for your business; employees benefit from it as well. It boosts their confidence, engagement and motivation as they strengthen their competencies and enhance their careers.
So, how do you execute succession planning in your company? This article will help explain what company succession is, how to execute and succeed at it and templates you can use.
Succession planning is the practice of identifying and developing talent for key roles across the company. It prevents talent shortages and ensures a smooth transition when important employees leave, get transferred or change roles.
Preparing employees to take over leadership may take many forms, such as:
Filling the talent and leadership pipeline with trained employees can benefit your business in many ways. Let's take a look at why you should start investing in succession planning today.
Training and development are at the heart of effective succession planning. It provides a platform for high-impact training programs that train and equip high-potential individuals to take on crucial leadership roles in the future.
Training isn't just about providing courses or learning materials. The employee’s professional development may come in the form of coaching, mentoring, job shadowing, or a gradual increase in more advanced responsibilities. In other cases, it may require the candidate to get additional education or professional certification.
Succession plans highlight areas for growth so employees can develop critical skill sets. It empowers potential leaders to thrive now and in the future.
A survey from Better Buys shows that employees who access professional development opportunities have 34% higher retention and are 15% more engaged than those who don’t.
When employees see an opportunity to move up the corporate ladder, they're more engaged. What makes it even better is their motivation to grow with your company. Statistics have shown that more employees will stay with a company that invests in their development.
Recruiting and hiring top talent can cost hundreds to thousands of dollars. And this cost will continue to soar if you don’t have a plan to shape up your talent pipeline with prospective leaders.
With company succession planning, successors come from within the company. This means you can save costs that would have gone into external recruitment. You’ll be able to invest the money in other aspects, like training and development.
Let's face it. Change is inevitable. Your essential employee could become ill or be poached by another company for higher pay. When unplanned, it can make or break your business. The exit of any important member of your company means important roles will go unfilled for too long.
Let’s say your lead software engineer suddenly resigns. This could put your business's success in jeopardy. Without a successor, your entire system will crumble and you could lose business.
With succession planning, change management becomes a breeze. Since you already have replacements for crucial positions, your business isn't left vulnerable when change happens. The successor simply steps up to the plate and it's business as usual.
The beauty of having a company succession plan is that it helps you discover gems.
With the right approach to succession planning, you'll easily identify, develop and retain key employees who perform well in top roles.
Having come through the ranks, these talents embody the company's mission. As they grow, they acquire everything it takes to lift your organization to great heights.
Here's another advantage of having a strong talent and leadership pipeline. You're not boxed into picking anyone who's simply available. You can measure your options and make the best decisions regarding potential successors.
Also, you can align your succession pool with your diversity and inclusion goals, ensuring a representative leadership pipeline.
When leaders are cognizant of their potential successors, they can offer mentorship and impart valuable knowledge. This ensures that when leaders step down, their legacy and influence will remain. Not only that, but institutional knowledge is preserved and passed down.
Their successors will carry on the dedication and effort invested over the years, allowing your leaders to imprint a lasting legacy on the organization.
There are three main models of succession planning:
In this model, companies aren’t proactive with their succession plans. They just hope executives don’t resign, retire or die. And if that happens, they hope they find the right replacement as soon as possible—via recruitment or promotion.
When there's a gap in critical positions, someone within the organization is promoted. As an alternative, external candidates are sourced, interviewed and selected. In this case, it can take up to 12 months for the new hire to settle in fully or become productive. The worst part? Many of these appointments—about 30%—are found to be unsuccessful.
The nominal model is a more efficient succession planning model than the Hope model. It involves identifying one to three successors for crucial roles. These individuals should be capable of seamlessly assuming these roles on short notice.
The robust model is the most effective succession planning model. It entails building a talent pool with individuals who have the potential to assume critical positions at different levels of your organization—not just executive positions.
The next step is to assess their abilities, attitudes and skills, as well as their training and development needs. These individuals are then groomed to fill vacant positions within the organization whenever needed.
Succession planning can look different from organization to organization. However, the general process typically falls into these three critical phases:
Each phase has different steps your company needs to take to develop an effective succession plan.
Step 1: Understand your company’s strategic direction based on the overall strategic plan and workforce plans. This will help you steer your succession planning efforts to meet your company's evolving needs and sustain success.
Step 2: Conduct a SWOT analysis to determine where your company stands in terms of succession planning. This helps you identify both internal weaknesses and strengths as well as external opportunities and risks, which can impact expected outcomes.
Step 3: Write down your succession planning goals. Make sure they align with your workforce plan and company-wide goals. For example, your goal could be to:
Step 4: Pinpoint the business gaps and challenges that could affect your company in the next 1–10 years if succession planning isn’t executed.
Step 5: Specify roles and positions critical to your business's survival and growth. These are roles that aren't just urgent or catalysts for success but are important for business operations and meeting short and long-term company goals.
Step 6: Identify the important skills, abilities and institutional knowledge that make the company successful and sustainable.
Step 7: Analyze the current workforce to discover whether or not there are qualified individuals to fill these critical positions
Step 8: Develop a Success Profile. This document should detail the education, skills, knowledge and competencies that talents need to succeed in that role. Also, include information about position demographics like age, gender, location, level and experience.
Step 9: Nominate promising employees and potential successors for important roles.
Step 10: Specify the learning, training and development needs or experiences necessary for your successors to excel in leadership positions and other critical areas within the organization.
Step 11: Create a training and development plan. Ensure each plan is tailored to each role and succession candidate and is designed to help candidates close skill or experience gaps. Align training plans to the knowledge, skills, languages and capabilities required for current and future roles.
Step 12: Execute training and a career development plan.
Creating corporate training programs helps potential successors cultivate and enhance their skills. Professional development can take various forms, including mentoring, coaching, task or job rotation, job shadowing or assuming higher responsibilities. They may also need to enroll in formal degree programs, courses and workshops or pursue professional certifications to further enrich their skill sets.
Step 13: Discuss with current leaders how they can pass on knowledge before leaving the organization. Implement a structured blueprint for knowledge transfer, facilitating the exchange from experienced employees to those in the learning phase.
This can involve initiatives such as mentoring programs, coaching sessions and on-the-job training, ensuring a seamless transfer of expertise and wisdom within the team.
Step 14: Evaluate progress and measure the success of your succession planning efforts.
Review, compare and communicate progress with different stakeholders every 6–12 months. You can monitor the effectiveness of your succession plan using metrics like bench strength, career path ratio, retention, time to fill, diversity metric, risk of loss, cost savings and more. These indicators will help you communicate progress to senior leadership, succession candidates and the organization as a whole.
Succession planning is a winning strategy for longevity and business success. However, you need to deploy the right tools and templates at every step to ensure a streamlined company success planning process.
Let's check out some of the tools and templates you should have in your stack.
Creating a strong plan for when employees leave is crucial, whether it's due to retirement or other reasons. This company succession plan example is here to help you build a solid strategy, ensuring you're ready for any changes.
It provides crucial information about the leadership pipeline, ideal candidate profile, assessment, training and more. You can easily customize everything in Visme, from colors to text and fonts. Visme also has a rich library of stock images, icons and videos to make your document engaging. Feel free to make this template your own. Use the features in Visme to create a succession plan that fits your needs and looks great too.
Here’s another succession plan that can secure your business’s long-term success. This plan offers a clear roadmap for developing successors who can elevate your business to new heights. It helps ensure important aspects of succession planning don't slip through the cracks.
Use this business plan template to ensure your succession planning efforts are directly aligned with your company’s strategic direction. With Visme’s data visualization tool, you can visualize data such as:
You’ll find different types of graphs, charts, maps and widgets to present data in a captivating way. As you groom successors, share your business plan with them. It will help them understand where your company is headed and continue to work towards the same objective.
Creating a business plan facilitates a smooth transition. It also sets the stage for the continued success of your organization. Keep the plan up-to-date with changes in business and industry trends. This way, you can ensure that the succession plan meets the needs of your organization as it evolves.
Conducting a SWOT analysis helps you assess the strengths and weaknesses of potential successors. Knowing these strengths helps you harness and build on them. By pointing out their weaknesses, you can develop training and development plans to address these gaps before they assume leadership roles.
Use this template to assess your company’s readiness for succession planning. You can visualize future opportunities and threats to leadership transitions in your organization.
If you have a succession plan strategy, the SWOT framework can still work. You can use it to evaluate the status or effectiveness of your succession plan.
It’s also effective for making informed decisions about the best candidates for leadership roles and development initiatives, as well as making potential adjustments to the succession plan based on the external environment.
Succession planning isn’t just about replacing leaders. It’s a strategic approach that considers external factors that influence leadership transitions like industry trends, market analysis and the competitive landscape.
Conducting market research will keep your company in tune with the realities of your business landscape. Armed with this knowledge, you can ensure your successors are equipped to navigate industry shifts and capitalize on emerging opportunities. It enables you to align leadership development strategies with the external forces shaping your industry.
Use this template below to capture the report of your market analysis.
