Every successful business entity has a longer lifespan than that of the staff members. Take Apple, Nike, and Coca-Cola for example. They have existed so long that their CEOs have been succeeded.
To protect your business from an untimely end, you must consider a succession plan. Grooming future leaders in this plan will result in cost reduction, better results, and shield the company from unplanned disasters.
According to the insight from Deloitte, 30% of newly hired executives fail in their first 18 months. This is mostly due to poor culture fit—a problem the right succession plan can address. A company that hires a new leader who doesn’t fully understand the organizational beliefs is planning to fail.
Additionally, 94% of employers report that the involvement of a succession plan positively impacts their employee engagement levels. So employees become happier and more committed to the job.
In this post, I want to share with you the reasons you need a succession plan now, and how to create one that works. Let’s dive in.
Succession Planning: What Does it Mean?
Succession planning is a technique for identifying, developing, and passing on the baton of leadership in your organization. It can happen at any level of leadership, and it’s used to address the unavoidable occurrence in case a key employee resigns, retires, or dies.
It involves inter- and intra-sectional training of identified staff members so that they develop skills, knowledge, and understanding of the company’s culture and top-level communication and interaction.
Why You Should Develop a Succession Plan for Your Company Now
In case you’re wondering if you need a succession plan for your company, here are some key reasons to develop one for your company.
Helps you identify the best-fit executive
Before choosing the potential leader in your organization, you should not only consider the professional experience but also their relationship with other staff members. It can help you to dig out the true leadership nature of any individual, so you leverage their emotional intelligence, problem-solving, and communication skills. It will also help to create opportunities for professional development and collaboration.
Removes the hiring process headache
Hiring the best-fit individual for a job is tasking, and more of a headache if it’s for an executive position. It’s a delicate hiring process, partly because of the high salaries executives expect. With succession planning in place, you can easily give a chance for an internal candidate who already embodies the organizational culture and values to take the leadership position. That way, the company won’t waste time on hiring and onboarding a new executive.
Assists in calming the board members
When there is a need to fill a leadership position, board members can be bothered because they know that a wrong hire could cause an irrevocable imbalance to the organization. Having a succession plan in place calms the board as they understand that the company is committed to uninterrupted growth and that loyal employees will be promoted to assume leadership status.
Allows a company to plan for the future
Thinking about the new leader from the onset could help your company create a future roadmap. By identifying the attitudes, vulnerabilities, goals, and aspirations required of your potential leader, you can chart a growth course for them and the company. This might involve training, getting certifications, or having them shadow executives in preparing for the “big shoe” and making them a more valuable team member.
Enables you to maintain brand uniqueness
Having a leader who already internalizes the norms, ideals, and values of your company solves the problem of customer confusion and brand imbalance. For instance, if a new executive proposes a change in the company’s corporate mission statement, that may be disastrous for the company. This is because this new executive is yet to blend with the organization’s values. Imagine what would have happened to Microsoft if Satya Nadella hadn’t held leadership roles across the company for twenty-two years before changing the company’s corporate mission statement as the CEO.
Ready to Develop a Succession Plan? Here is How to Create One That Works
1. Identify your organizational needs
Why do you want to create a succession plan? Is it because of an unplanned exit of your executive due to sickness or better opportunities? Carefully identifying your organizational needs will help you to chart a plan that works. Some organizations develop a succession plan because they visualize a strategic direction, and they need to equip their employees with the competencies required to fill critical positions and drive the innovation.
2. Launch a succession planning committee
Putting together a team to participate in the succession planning is as important as developing the right person. Their skills, knowledge of the company, and internal network will improve the chances of proper selection. Ensuring that the committee comprises problem solvers, critical thinkers, effective communicators, and analytical decision-makers will help you achieve your aim of selecting a good leader.
3. Adopt a robust succession plan
If your succession plan focuses on replacing CEOs alone, your company will be at risk of survival. Working on a system that covers the overall leadership of the organization will promote the viability and resilience expected of a successful company. Making plans for a systemic and multilevel succession plan will help balance the company’s leadership team whenever a key position empties.
4. Connect a succession plan with your organization’s strategic plan
Your company’s strategic plan is the breakdown of your mission and vision. It points out what you want to achieve and also how you want to go about it. Since humans drive this plan, a succession plan must be connected to it to identify the key positions that need to be created and filled. Including both plans with your company and goal influence will lead to successful succession planning.
5. Select candidates for the succession
The next stage after you’ve identified the positions you need to fill is to create a pool of prospective candidates for each leadership bucket. You should consider itemizing key competencies such as talents, skills, knowledge, and experience required for each key position. After this, you’d look inward to your current employees to select who the cap fits.
6. Take action immediately
According to Teala Wilson, succession planning helps build the bench strength of an organization to ensure the long-term health, growth, and stability. However, this can never be achieved if an action is not taken. So you should take action by bringing the plans into reality: setting measurable goals, stating deliverables, and milestones. Also, you should attach it to a specific timeline, and knowing who to account for specific responsibilities will lead to a successful implementation of the succession plan.
As you can see, having a succession plan in your company can save you a lot of stress. This is because there is a shortage of top talent in the employee market, and finding a brain that fits a leadership space is daunting. When you have a succession plan, you won’t have to worry about that.
Once you do, filling a leadership position in your organization will be smooth, and you’ll have no fear of organizational mismatch.