The National Council of Acoustical Consultants (NCAC) recently asked me to speak at their annual conference on the topic of succession planning. While I was excited to do it, the timing (unfortunately) didn’t work out on my part. But the ask got me thinking about my own experiences with succession planning, in general, and more broadly about how much it’s overlooked and misunderstood in two key ways:
- Succession planning is not just about finding someone with the requisite skills to assume an empty role. Instead, it should be viewed as a people-specific need within an organization’s business continuity plan.
- Succession planning is a must for any role that maintains ownership over business-critical tasks and where the loss of such an employee would create significant disruption to one or more business operations. Yes, this can include non-management positions!
One report from Gartner ranks leader and manager development as one of the top priorities for HR leaders in 2024. The same report also states that 26% of CEOs rank talent shortage as the top damaging factor to business outlook. That data, however, doesn’t include the often-overlooked difficulty that comes with filling empty roles for subject matter experts (SMEs), whose presence is often essential but who don’t lead or manage teams.
The need for succession planning extends leadership positions. 95% of Americans have plans to switch jobs in 2024. Despite a rocky economy and crazy-high inflation, the job market is still pretty strong, especially for high performers. This means that the next leader of your company might be walking right out of the door and into a new role that suits them better
Don’t let your future leaders slip away from you. With succession planning best practices and the right mentoring programs to nurture existing talent, you can show your employees the paths open to them when they choose to invest their time with you.
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What Is Succession Planning?
What will happen when those in critical positions leave your organization? Senior leaders might retire, a key member of staff might need extended maternity or paternity leave, or a gap might be left when someone needs to suddenly sign off on sick leave.
With effective succession planning in place, you should — as the name suggests — have a plan for who will succeed your leaders and key contributors, no matter the reason why they might leave. You might have an idea of exactly who you want as the replacement, or you might just have an idea about the type of candidate you would like to see considered for the role. Remember, succession plans should form part of the company’s business continuity processes as they are created to minimize disruption as much as possible.
Succession planning is a critical business operation, and yet few companies actually choose to engage in it. A 2021 survey of HR professionals found that only 21% of respondents came from an organization with a formal succession plan in place, with over a third (36%) saying they didn’t have a plan at all.
Bringing up the succession planning process should not feel like someone preparing to dig their own grave or creating a launchpad for their successor. It should feel like the natural progression of the company’s strategic goals. It is only realistic to assume that an employee and a company will part ways at some point, and replacement planning could form a key part of the employee life cycle.
Mentoring software can help you properly align succession planning goals with a measurable, people-focused development plan. Book a demo to learn more about how MentorcliQ helps companies overcome talent disruptions with mentoring.
What Are the Common Reasons for Not Having a Succession Plan?
Over a third of businesses (36% ) don’t have any succession plan, formal or otherwise. As with everything in life, there is always an excuse. We’ve pulled out three of the common reasons why a business might not have a succession plan, but we’ve also added a little refutation to each one.
Lack of time and resources
We get it — this is one more operation and process that needs to be planned out and captured. No one enjoys having to update company procedures, but putting in the succession planning work can bring benefits further down the line.
The average executive cost-per-hire can be, on average, a whopping $28,329. Companies cannot afford to waste time cycling through candidates searching for that diamond in the rough. Succession planning highlights the skills that top talent needs to demonstrate. By identifying what these skills are, effort can be put into either nurturing existing employees and aiding them with their talent gaps, or honing in on what the perfect external candidate can offer.
The organization is too small
Small organizations benefit from succession planning just as much as big multi-office operations. According to data from the US Census, the majority of US businesses have fewer than 5 employees. In small businesses, we often see those in key positions wearing multiple hats and managing tasks that might typically be out of their usual job description. For example, someone might have been hired for their marketing background, but their tasks also cover areas that might traditionally be held by sales or customer service.
There could even be one person who is not in a senior role, but who holds a great deal of institutional knowledge, like an office administrator who’s been there since the beginning. If either of these employees leaves, there is suddenly a massive talent and knowledge gap that needs to be filled. It might be trickier to find a replacement than you might think!
A succession plan helps address these crucial positions and how they might change going forward. Do you commit to finding that one candidate who could fill critical roles as they have been left, or do you split the role and source enough cover for all emerging gaps? Both could be valid options, and one path isn’t necessarily more viable than the other!
The company is family-owned
Look, I watched the HBO hit Succession, and I hope you did too. Family-owned businesses are not exempt from succession planning needs, and if anything, their succession planning difficulties may be even more challenging and distinctly political in nature.
OK, there is a bit of a difference between the average American family business and Waystar Royco. Still, that doesn’t mean that there shouldn’t be any succession planning efforts.
When a business is family-owned and operated, the assumption is that the founder’s children, grandchildren, and even nieces or nephews may play a role in operations. If so, the founder may choose to actively mentor their family members to ensure that their legacy remains intact and the business is in safe hands when they choose to move on.
However, there is no guarantee that this will be the case. In this scenario, succession planning can be used to find external replacements. Again, there may be an element of legacy protection so that the core values of the business can remain intact under new management.
Such a succession plan may also address the level of involvement the family has within the company. They may not want to sit on the board of directors and make critical business decisions any longer, but they could still remain majority shareholders with a say in how the company is directed.
What Are the Benefits of Succession Planning?
Though this can seem like another troublesome company process to manage, it can bring a lot of rewards beyond simply finding the right person to step in another’s shoes. Some of the benefits of succession planning can include:
Minimal disruption to the business
Whether someone has to leave suddenly or their departure can be seen months in advance, effective succession planning can help minimize disruption to critical business operations.
Team leaders will need to prepare employees to deal with the departure of the person anyway. Whether it is someone in management or just that one employee who seems to know all the ins and outs of how things actually work, the space they leave in a team roster can cause disruption if not properly handled.
Succession planning ensures that there is someone ready to step into that gap. Setting up leadership continuity prepares not just the departing employee but the whole team. All relevant information can be passed on, the replacement can shadow the leaver for a little while, and everything involved with knowledge transfer and structure can easily be passed along.
Internal mobility
If you have put a lot of effort into finding key talent to fill positions further down your corporate ladders, why would you not want to hold onto them? If you don’t offer professional development to employees, they will search for it elsewhere. Research has shown that a third of employees are willing to resign if they lack learning opportunities and clearly defined career mapping. Career growth and advancement are high priorities for many workers; they want to keep moving forward.
Succession programs often don’t kick into gear when someone is thinking about leaving. Things tend to start much earlier than this, and can often involve active development of a company’s talent pipeline. Choosing to create leadership development programs can help to grease the wheels of internal mobility. Onboarding mentors or a buddy system can help these new employees easily find their feet and think about what they want their talent development to look like within the company.
Mentoring and support of the next generation of leaders
Offering routes for internal mobility isn’t enough. Succession planning observes that there is a space for someone new to step into and tries to define who that person might be. If no one is willing to take the step forward, critical roles could be left unfilled.
Improve succession planning with a mentoring strategy that is designed to offer that extra level of support and help people considering leadership roles.
Boosting employee morale
Employees who feel valued and supported will always feel more engaged and connected with the company. They will consider their future roles and hopefully see a space for them in the business’s plans. Job satisfaction will rise as they feel like the effort and hard work that they put into the business is reciprocated through opportunities presented to them.
Place talent development programs in the hands of employees and let them dictate how they advance their careers. From those who actively participate, a potential successor of tomorrow might emerge. For the others, it might be worth looking into mentoring or some other scheme that could best help them to engage with the business once more.
Mentoring helps boost employee morale through direct, person-to-person engagement and development! A quick demo will help you learn how MentorcliQ puts the human element front and center in succession planning strategies.
What are the Steps of the Succession Planning Process?
Identifying employees and offering them development is just one part of a much wider and slightly more complex process. A full succession planning framework might include some of the following steps.
1. Identify key positions and skills
You can’t replace something you don’t know about! Before even considering candidates as potential successors, you need to consider the critical positions and leadership roles that would bring major disruption to the company if lost.
Everyone always starts at the C-suite, but we cannot stress this enough: look beyond that.
Yes, a business is going to run into trouble pretty quickly if the CEO retires without naming a successor. That kind of thing usually makes investors nervous and tanks stock values. But what would happen if your payroll officer went on sabbatical? How would the CEO manage their calendar if their executive assistant retired? Could the business as a whole cope if someone from IT support took parental leave? These are oft-overlooked business-impacting talent losses that can hurt revenue generation company culture, and broader employee retention.
None of the roles we mentioned above are necessarily managerial, but they all carry a level of responsibility for a critical area of the business. Succession plans should be created for roles such as these, so business continuity is not compromised if one key employee has to leave suddenly.
2. Identify potential successors amongst internal talent
Now that a company has an idea of the skills and jobs that might be impacted by a departure, sudden or otherwise, leadership can look for high-potential employees who may be the right fit for the role. Often, the top talent you are searching for can be found already in your teams.
Nowadays, many employees will view their current job as just one stop in a long and fruitful career. They think that if they want to see continued success and career advancement, they will have to move to a different company. If this is what they truly want to do, don’t stand in their way. There is still plenty of support to offer these employees, but for succession planning, you want the focus to be centered on those considered for internal positions.
3. Create training and development plans
With a willing succession pool created, now is the time to implement leadership development strategies to help prepare these internal candidates for future leadership roles. Each journey will look a little different; some candidates might benefit from exposure to the role and shadowing the person they could replace, while others might need to develop their soft skills a little further.
The overall goal of succession planning should not be to elevate one employee over many but to offer opportunities to anyone interested in what future roles might be.
4. Prepare for the transition
Though succession planning is not usually created with one employee in mind, there should come a point where the company is confident that it wishes to support one particular candidate.
At this stage, there should be a period of transition. Ideally, succession planning should link up neatly with the handover period. This gives everyone time to adjust—the departing employee, their replacement, and the team they will be joining or possibly even leading.
Handovers should never drag on too long. Outlining expectations and milestones in a succession plan can help keep things moving forward smoothly and at a good pace.
Mentoring programs can form a key part of the handover and transition process. Mentees should be given the opportunity to shadow the outgoing employee. This better facilitates the transfer of internal knowledge and skills, and can provide key insights into the experiences and scenarios the new employee is likely to face in this role.
5. Review, review, review
What would any planning process be without a review stage? Yes, succession planning is going to come with some degree of review. Every stage of the planning process should be adequately documented to ensure that the succession plan is viable and delivers the results expected.
Reviewing the process can also reveal what didn’t work. Can you adapt any gaps that might still exist? Were there any parts of the handover that proved to be more complex than previously thought? All of this can help inform how the succession planning process is handled in the future.
What Should You Consider When Selecting Candidates for Succession?
Succession planning is less about identifying employees specifically, and more about thinking about the critical roles at the company and the qualities needed for good performance in them. Regardless, there are some key qualities that every candidate should embody. Though key skills and industry knowledge might differ across each of these critical roles, consider the following when evaluating internal candidates.
Bias
Not the bias of the candidates (though this is always something worth bearing in mind), but the bias of those selecting the succession pool. We have a tendency to pick like for like, often unconsciously choosing to match the race and gender of the appointee with that of the one departing. Edward Chang studied this concept as he looked at the appointment of over 2000 federal judges and 5000 corporate board members.
His research team uncovered that, when selecting replacements for departing women or racial minorities on a board of directors, the boards chose men 65% of the time and white people 75% of the time. We as a society are taking great steps towards diversity and inclusion, but we need to make sure that the progress we make is being felt at executive levels as clearly as it is at others.
Learning agility
How quickly can the succession candidates pick up new skills? Advancing in a career means that anyone will have to adapt quickly to new situations and scenarios. If someone is moving into leadership for the first time, or moving laterally across the company to a different department, they may find that they encounter people and problems that they have not previously in their working life.
They need to be able to pivot and adjust seamlessly. When engaging in the succession planning process, it is vital that candidates can handle anything thrown at them with grace and composure, as there is always likely to be little resistance during the transition period.
Self-reflection
Good succession planning candidates should frequently reflect on their progress. They should have a clear idea of their strengths and weaknesses and what they can do to improve on both. This, in turn, should feed into their own employee development plans, as they should be keen to increase their skills.
This is a good sign that they don’t over- or under-estimate their abilities. They are adaptable enough to fit into any team and can approach any task with a leveled and calm mind.
Risk management
We all need a degree of understanding of risk management in our roles. Though it is true that those in the leadership team might have to handle risk more frequently, or may have to handle higher levels of risk, employees at every level need to know how to handle a project if it does go awry.
An employee who keeps a level head and successfully mitigates the risks that arise will be better than those who panic and don’t know how to calm the situation. When considering the perfect candidate to fit succession plans, decent risk management should definitely be a desired trait.
Experience
Key skills and experiences should be identified as necessary for success in the role as part of the succession planning process. Therefore, when creating a succession funnel for candidates, the demonstrative experiences candidates will need to show should be considered.
Of course, lacking one particular experience should never hold back the right candidate. Still, a candidate’s collective professional and personal experiences should show that the candidate is prepared to take on any potential challenges that might come their way.
What are the next steps for your company?
A company culture that recognizes the strengths and needs of its workforce will always bolster effective succession planning.
Succession planning, in a nutshell, involves:
- Identifying the weak points where absence from a particular employee results in a widespread negative impact on business objectives.
- Defining the character, institutional knowledge, and skills required for replacing the departed employee, and comparing this character profile to internal talent.
- Nurturing candidates through mentoring and professional development to help them successfully transition into their new roles.
A succession plan won’t work without adequate support to help candidates through the tunnel towards their new positions and responsibilities. MentorcliQ’s award-winning software helps match mentees with the right mentors without bias and removes the unnecessary admin HR professionals would have to complete if using other matching schemes. Get your stars of tomorrow talking to the people who can help them the most.
Don’t just take our word for it! MentorcliQ’s mentoring software has been recognized as being amongst the best tools for succession planning (and we were rated the best for pairing mentors and employees for professional development!).
Book a demo with MentorcliQ today, and find out how we can help transform your internal mobility, retain the shining stars you help to develop, and protect your key positions. Take the next step in your succession journey with our help!
