What is Succession Planning in Business and How to Get Started With It?

For businesses of any size and industry, a business succession plan is crucial to ensure business continuity. 

When you plan succession, you need to identify key positions in your company and individuals most suitable for those positions. The planning involves both current and future goals while choosing the right person. As it helps you identify future staffing needs and the skills needed to perform these future roles, you can be prepared to avoid any kind of interruption in all situations. 

Continue reading as I take you on a tour of succession planning and how to start with it for your organization.

What Is Succession Planning in Business?

Succession planning is a business strategy organizations follow to smoothly pass on leadership roles to another employee or group of employees. For any business, it is vital to maintain uninterrupted operations following the exit of key figures of an organization due to retirement, resignation, or death. 

Moreover, it could involve the transfer of ownership to the talented and promising employees in the company. This planning should provide a fair opportunity for employees of all levels to advance and grow within the organization. Succession planning ensures that businesses are well-equipped to develop and promote skilled talent for business continuity and success in the long run.

How Does Succession Planning Work? 

Succession planning follows a systematic process to identify potential employees within an organization. It also ensures their skill development for a smooth transition during the changes in leadership. Thus, the process simplifies the approach of leadership or ownership transition.

However, the success of business succession planning depends largely on proper preparation. For this reason, companies often have an emergency plan in place to tackle unexpected changes that could affect the organization’s operations. 

How to Get Started With Business Succession Planning

#1. Plan Proactively

On occasions like a planned retirement, you will have a prior idea about the departure of a high-profile team member. But, unexpected employee departure will catch you off guard and interrupt business continuity. For this reason, you need to invest in a succession plan from now on. 

While considering potential talents for the key roles on your team, try to find out about the day-to-day impact of those positions in your company and how a vacancy will affect the overall operations.

#2. Identify Succession Candidates

After completing the assessment of the potential impact of someone’s departure, you need to identify team members who will be suitable for those positions. The most obvious successor could be the next person in the organizational hierarchy, but you should not overlook other potential employees. 

You also need to consider individuals with the necessary skills, regardless of their current position. At the same time, you need to know the career aspirations of the candidates you choose. Before making succession decisions, talk to those employees to understand their professional goals and aspirations.

#3. Inform the Potential Candidates

After you choose the potential candidates, you need to inform them about your decision. Private meetings are the best time to convey the message that you have chosen them for greater responsibility. 

You also need to make it clear that the new position is not guaranteed. Clarify that the situation might change in the future depending on the changed circumstances faced by the company or the candidates.

#4. Go for Professional Development

It is normal for companies to invest in the professional growth of their chosen talents. However, you also need to focus on accelerating their preparation. One helpful approach could be job rotation, allowing the candidates to acquire further expertise and exposure to the new role. 

Companies can also assign mentors to enhance their proficiency in essential soft skills, communication abilities, and other interpersonal skills like empathy and diplomacy.

#5. Perform a Trial Run

Trial runs are always helpful in finding out the true capabilities of your potential successors. You do not have to wait for a crisis to arise. Instead, you can test an employee’s ability for an advanced role with a trial run.

For example, when a manager is on vacation, a potential successor can take on the responsibilities for that particular period. This will function as an opportunity for aspiring employees to gather valuable experience and showcase their abilities to handle positional needs.

Moreover, you get the chance to evaluate the areas for improvement and assign necessary training sessions. 

#6. Include This Plan In the Hiring Strategy

The succession plan should not be an isolated process. For it to become completely successful, you need to integrate it into the hiring policy of your organization. The reason is when you will promote someone to a high-profile position, their own positions will become vacant. 

So, after identifying employees who could be promoted to vital roles, you also need to point out the gaps these talents may leave behind. Using this information, you can pinpoint areas that you should prioritize during your next recruitment drive.

#7. Plan for Your Successor

As you develop a succession plan for your company, do not forget the possibility of your position needing to be filled in the future. If you decide to pursue a new career opportunity or retire from the job, someone should be ready to assume your role.

Remember, your current workforce is not static; changes are inevitable in any modern team or organization. While you may work on effective succession planning to facilitate continuity, you should include yourself and find a pool of candidates that can replace you.

Key Elements of Succession Planning

• In every plan, businesses need to locate the crucial position for which they need to find a worthy successor. 
• It also has to find out multiple employees with knowledge, skills, and potential for additional responsibility.
• While making the plan, you should have a visionary understanding of the skills and training that will be required in the future.
• Skill development process and competency training should also be included in the succession plan. 
• This should not be limited to planning. Constant progress assessment is also a key element of it.

Benefits of Succession Planning

Prepare Your Business for Disasters 

Like your other efforts to disaster-proof your business, succession planning is another way to make your organization prepared for employee-related disasters. Succession planning is a crucial strategy to safeguard the long-term success of your company.

Though starting the discussion may seem intimidating, the sooner you start working on your succession plan, the better prepared your business will be for the future.

Identify and Create a Pool of Future Leaders 

Every company has some critical positions that should not be left vacant, even for a day. With this plan, you can identify potential internal candidates with the skills, knowledge, and learning needed to be in those positions. 

Moreover, it also offers you a thorough look at the potential vulnerabilities. If there is no eligible candidate among the internal employees, you can also start looking to hire external people. 

Build a Structure for Skill Development and Training

After identifying the right candidates, you can find out the competency gaps in them and start preparing them for succession. Depending on individual needs, professional development may require coaching, mentoring, job shadowing, or a gradual responsibility increase. 

By choosing them early, you offer them sufficient time to acquire the skills and gather experience. It also helps you build an internal framework for their training.

Maintain Brand Identity

Hiring CEOs from another company or competitor is a common incident, but the decision often fails to succeed as the external people fail to understand the fundamental values and working process of the new company.

You can avoid such scenarios with early succession planning. As it helps you identify and prepare an internal successor, that person is already well-aware of the company values and brand promise.

Avail Long-Term Benefits for Your Company

Changes could be intimidating, but early planning could keep your company prepared for the future. By making a succession plan a part of the overall growth plan of your organization, retiring employees can effortlessly hand off their knowledge and experience before leaving.

Basically, the aim of a succession plan is to assist your company grow as you work on fixing the vulnerabilities.

Common Mistakes of Succession Planning

#1. Starting to Plan Too Late

No matter what is the age of the leaders of your organization, you must start the succession planning as soon as possible. It takes time to find the right talent, so being late could make things problematic for your business.

#2. Not Thinking Strategically

One should not consider succession planning as the strategy to fill in the position of one individual. Instead, they should view it as a subset of the larger strategic plan to gather ideas about the crucial positions and potential employees who can successfully assume those. 

#3. Not Having an Emergency Plan 

Though planning is an ongoing process, companies need to remember that vacancies do not occur according to a timetable. Besides identifying people who need cultivation for specific roles, you also need to know who can immediately take over high-profile positions.

#4. Overlooking the Importance of Continuous Performance

You must focus on continuous performance management instead of considering an annual performance review. Otherwise, it might get difficult to find out people who are committed to your business.

#5. Not Supporting Succession Planning with Technology

Instead of manually managing a succession plan, you can support it with different tools and applications. These programs can provide you with the necessary insights into the capabilities of your workforce.

#6. Being Biased

Sometimes, we tend to judge people with bias. But, you should not make this mistake during succession planning. If you are biased towards the internal employees, you might not get the best people for the positions. Since succession planning is critical, you must cast the nets as widely as possible to rope in the best candidates.

Learning Resources

#1. Succession Planning for Small and Family Businesses

Are you wondering who will take over your business in the future? Do you have a small, family-owned business where you serve as the jack of all trades? In that case, your retirement or business exit plans will not work without a solid succession plan. 

Reading this book, business owners will get advice on management, financial, legal, and psychological issues they need to consider while planning business exits of all types. This resource includes a bold, comprehensive, and integrated approach to discussing the topic. It contains the author’s personal experience along with relevant, evidence-based research.

#2. Beyond Succession Planning

This book is essential for executives involved in strategic business decisions related to organizational sustainability and growth. From it, you can learn to align workplace transitions with the organizational vision and strategies. Thus, you will not have any trouble meeting the needs of all stakeholders while having a steady flow of talent. 

This resource also offers a road map for carrying out the plan and proposing a cutting-edge leadership style that matches the strategic approach. It also discusses meeting the emerging learning needs of people striving to obtain new responsibilities in detail.

#3. Succession Planning A Complete Guide

This book is a comprehensive guide that covers all succession planning essentials, including the burning questions people have regarding this topic. It also contains extensive research grounded in past experience and successful projects of the present time by seasoned succession planning practitioners.

Reading this resource, you will learn how to ensure a positive outcome of your planning and get maximum professional results. There are also checklists for succession planning.

Wrapping Up

Business succession planning is necessary to keep your critical roles filled and nurture the most promising talents. If you do not have a succession plan, it is high time you consider it with priority and starts planning with a positive approach.

You can go through the steps mentioned in this article to start planning your business succession. Also, be aware of the common mistakes people make during the process and work to enjoy the benefits it offers.

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