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Successful Succession Planning in 2021 (The Ultimate Guide)

Learning and Development | 10 Min Read

Successful Succession Planning in 2021 (The Ultimate Guide)

Introduction

There is no success without a successor, says Management Guru Peter Drucker.

Yet, many businesses are not receptive to having a succession plan. This apathy stems from either by delaying the inevitability of their retirement or the sheer reluctance to let the next generation assume leadership positions. Imagine a situation where a potential employee in a critical position leaves abruptly, or an unforeseen circumstance forces a key leader to retire. The absence of a successor or a robust succession plan will create a domino-like effect, leaving leadership gaps all along the succession line. It will jeopardize the establishment’s future besides diminishing its legacy. Without an anointed successor, the company may not have a rescue plan to ensure business continuity. 

Finding a rightful successor for business continuity has been an ongoing part of humankind’s existence. Be it succession in monarchies across the globe in ancient history or the succession to crucial business roles in an organization now – succession planning is a recognized motto that should be embraced by all. 

No defined protocol covers all the details or points out a path best suited for planning your succession. Companies devise policies and processes they deem fit, considering the bigger picture. And somehow, this cavernous content often overwhelms and confuses those involved in succession planning.

So, here’s the ultimate guide book to succession planning that works. This book will familiarize you with and reveal some of the most critical components of succession planning, enabling you to navigate this valuable strategy and save you from future disruption. It will also lay the fundamental groundwork for understanding and prioritizing your organization’s current and future requirements.

This refined knowledge is all you need to get started on a succession planning model if you’re still contemplating it. 

In this comprehensive guide, we’ll cover: 

  • Chapter 1: What is Succession Planning
  • Chapter 2: The Types of Succession Plans
  • Chapter 3: Objectives of Succession Planning
  • Chapter 4: Succession Planning Importance 
  • Chapter 5: Disadvantages of Not Having a Succession Plan
  • Chapter 6: Who Needs Succession Planning
  • Chapter 7: Succession Planning Process
  • Chapter 8: Succession Planning Tools
  • Chapter 9: Case Study
  • Chapter 10: Frequently Asked Questions
  •  Conclusion

Let’s begin!

 


Chapter 1: What is Succession Planning

Succession planning is a strategically tried out process of identifying the next generation of leaders who can ensure business continuity when key leaders move on to new opportunities, retire or pass away. It is a means of preserving the company’s future and stakeholders associated with it.

By identifying possible successors for crucial roles, honing and nurturing their talent, and ensuring they seamlessly fit into the organization’s structure, companies future-proof themselves against the most visible and unforeseeable odds. 

But succession planning is not done on a whim. It is orchestrated as a well-structured step-by-step process that combines regular activities and ongoing procedures to comprehend and evaluate potential employees as future leaders. Various companies ensure that the succession plan is adhered to periodically and is adapted, considering the evolving workforce. After all, it is ideal for mitigating risk and building value. 

Technically, succession planning covers the senior-most positions in the company’s hierarchy, but companies should also consider critical roles along the various stages of the corporate ladder. 

Employee development is also integral to succession planning. It builds a high-level of engagement in the high-potentials who desire achievements and career advancement. Companies also undertake a succession planning model to anticipate the skill set of their talent pool.

 


Chapter 2: Types of Succession Planning

Each business structure will require a different type of succession plan. For example, sole proprietorships and partnerships, the owners and managers can make decisions on succession rather freely, whereas a corporation with a board of directors, will need to follow the formalities of the corporate bylaws and rules.

David Reischer
Esq. Attorney & CEO of LegalAdvice.com


There is no one-size-fits-all approach to implementing a succession plan. There are various
types of succession planning models that a company can implement at all organizational levels. It might be to fill in an inherent leadership position that employees look up to in an organization or find an ideal board member replacement. A succession plan is placed at all levels of the organization. 

But, there are broadly two types of succession plans prescribed by experts. They include-

 

two types of succession plans

 

If followed in an orderly manner, they ensure minimum impact to operations and functionality in the long run. It is an ideal way of planning for succession across several levels, including business succession planning, CEO succession planning, management succession planning or employee succession planning in a given organization. 

Let’s explore them in detail.

1. Leadership Succession Planning:

To minimize the effects of sudden instances or to have a back-up when a key leader puts in their papers, a leadership succession plan is incorporated to ensure smooth operations. It involves analyzing and evaluating specific skills or competencies in a shortlisted talent within the organization to take the helm appropriately. It is undertaken for senior executives such as Vice Presidents, CEO, CMO, CFO, COO, Directors and board members to replace dormant members or fill in the committee expertise and skill gaps.

*Two types of leadership succession planning

   A. C-Suite      B.   *Board Members

2. Non-Leadership Succession Planning:

HRMs can also utilize succession plans for specialized blue-collar or white-collar employees in niche roles under employee succession planning, staff succession planning, workforce succession planning or managerial succession planning categories. These niche roles may not only be mission-critical but are also difficult to replace. Hence, a company must be prepared for the same with a succession plan that is facilitated via cross-training processes and individual- and team-work goals, aligned with the department or organizational strategies to find viable successors.

* Type of Non- Leadership Succession Planning

   Critical Roles

 


Chapter 3: Objectives of Succession Planning

Why does one bother with a succession plan? Why is it imperative to create a plan early on in the setup? 

Apart from the fact that it positions your leadership for success and helps prepare for the unknown, here are some key objectives of succession planning in an organization that bring more perspective to the entire process.

 

Ensures Continuity


One of the
goals and objectives of succession planning is to ensure all-round business continuity effectively. Building a leadership pipeline by shortlisting or developing the skills needed to maintain a forward-looking trajectory for your company automatically makes it future-ready. It ensures that you are less likely to rush into making wrong decisions during crises.

 

Succession Planning Identifies Critical Positions in an Organization 


A perfect
objective of succession planning in HRM is to identify mission-critical frontline positions crucial to a company’s success. C-suites aren’t necessarily the only significant positions. Middle-management and market vulnerable roles such as sales are equally important in many companies. With a succession plan, companies can outline a defined structure with role-specific job descriptions and strategic contributions that offer clarity to the executives and board members. Concurrently, you also identify obsolete or declining positions within the organization. 

 

Underlines the Organization’s Competency Levels 


Another
succession planning strategic objective is implementing competency mapping criteria in the organization. When you’re eyeing sustenance and growth in a competitive environment, critical competencies help you understand the attributes already possessed by your organization. It offers a detailed understanding of talent competencies that is to be recruited, promoted or developed for long-term stability. Competency mapping is a comprehensive matrix that is practical and worthwhile when planning for succession.

 

Identifies Potential and Promotes Development

 

Not all employees are leaders. However, their talents can be honed to ensure they have the desired qualities to meet, if not exceed, business demands.

Hence, succession planning’s smart objective is to understand their strengths and vulnerabilities, enabling HR to identify existing employees’ latent talent or untapped potential. Such insights enable the management to initiate functional cross-disciplinary training, mentoring and skill development for the designated employees to enhance their existing capabilities. This initiative ensures a better understanding of the talent pipeline available internally while creating awareness of the current individuals’ strengths. It also keeps the company a step ahead of its talent needs. 

 

Gives Valuable Insight into Workforce and Departments 


High-potential identification is the first step to any succession planning exercise. To begin with, HRs must gain valuable insights. For example, which employee is nearing retirement? Is an individual donning several hats? Is that employee a perfect asset and, therefore, must be retained? Which employee is a misfit and needs to be given a different role? Whose expertise requires a departmental shift? Several such critical insights come into consideration. These cumulatively enable creating successful transitions without causing intermittence.

Vinay Amin, CEO of Eu Natural, states, “Succession planning must be done subtly, progressively and in the background. Group training, team building, extra responsibilities all play a part in preparing employees for key roles, but this should occur within the natural scope of a working day.”

 


Chapter 4: Why Succession Planning is Important

What are the benefits of succession planning in an organization or the purpose of succession planning are usually the two most common questions that employees tend to ask the management when a succession planning system is implemented. Well, let’s just say succession Planning should be an underlying philosophy of every organization. Here’s why:

Avoids Transitional Shortcomings

A succession plan upholds the company’s vision and mission, ensuring that owners and executives understand the business’s future direction. The board can often be rigid about its values. The board members wish to maintain the company’s culture and how values are implemented. A well-charted succession plan provides the board with the necessary confidence in new leaders to maintain continuity in the company’s broader intangible objectives.

Ensures Availability of High-Potential Future Leaders

A succession plan also creates awareness about the quality and strength of your high-potential employees. High-potentials exhibit high competency levels in their current role and a high propensity for taking up more significant future responsibilities and challenges. Your awareness about an employee’s ability to take on critical future roles makes your workforce future-ready, providing a distinct business advantage. IBM is an excellent example of internal succession planning done right.

Boosts Retention and Engagement

Succession planning’s importance extends to offering excellent incentives to employees. If the employees understand the value accorded by their company to them, they are motivated to work toward the business goal. It improves the company’s retention and employee satisfaction rate. The succession planning process also attracts quality and dependable candidates from the onset.

Competitive Advantage

Amid a fast-transforming business landscape, a thorough succession plan bolsters your chances of managing disruptions. Only able and foreseeing corporate leaders can embrace the risks and uphold the company’s reputation and long-term growth. This enables them to focus on longer-term business opportunities rather than on the opportunities in the next few quarters. Hence, in business, succession planning’s importance is undeniable.

No Lengthy Vacant Period

Internal candidates are well-familiarized with the company’s culture. Hence, they are inclined to proactively take charge and smoothen the transition from one leader to another. Hence, succession planning benefits extend to disaster-proofing your business against such odds.

Lower Expenditure

Having a succession roadmap is often perceived as an expense by the company. But it is the other way round. One can’t prepare a succession plan overnight. It’s an ongoing process that minimizes time and financial resources in shortlisting, recruiting and grooming leadership from outside when you already have a qualified pipeline of candidates internally.

 


Chapter 5: Disadvantages of Not Having a Succession Plan

While some businesses have a definite succession plan, others do not possess such a structure.

As per a study conducted by the Canadian Financial Executives Research Foundation (CFERF), only 40% of Canadian private companies have a clear business ownership succession plan.

Such instances pose grave challenges and disadvantages to the business continuity in case of unforeseen situations. Here’s how:

Uncertainty

Not having a succession plan will expose the company and its stakeholders to unnecessary risks, adding more confusion and chaos. Leaving critical roles vacant for an uncertain period may severely damage the business infrastructure.

Thinning of Internal Loyalty

Alienating potential successors and promoting the wrong talent due to hasty decisions will only create a volatile work environment and a lack of motivation. Many may perceive the action of training their subordinates or outsiders over them for leadership as wrongful. A textbook example is that of P&G. It did not or was not able to promote a successor from within its ranks. Many experts and in-house veterans have claimed that choosing an outsider may have endangered the employees’ loyalty.

High Attrition

According to the Work Institute’s 2019 Retention Report, 36% of employees quit within the first year of their work for various reasons. But according to a report by HR Drive, 75% of causes for employee turnover can be prevented. Employees want a growth opportunity in the company. If they don’t see the company investing in their professional development and career advancement, they may choose to leave their jobs. Consequently, the company may end up losing a high-performing employee.

Unorganized Architecture

We agree it is challenging to foresee business challenges. But in the absence of a succession plan, it isn’t easy to survive an evolving business landscape. For example, It’s not prudent to announce someone’s retirement and not name a replacement. Microsoft was in a similar position when Steve Balmer abruptly announced his retirement in 2013, without naming a successor. With a plan, neither the company’s structure exposes itself to such developments nor reflects poorly on its fundamental responsibilities.

Misguided Hiring

A succession plan lays down the fundamentals for new hires by matching them with the existing pool. But what happens when the metrics to evaluate the hires are missing? We don’t blame them, but hiring managers do end up missing the red flags, taking missteps in the hiring process and hiring a bad fit. It leads to talent shortages and various other issues that exacerbate the problems.

Josh Baron, the co-founder of Boston-based firm Banyan Global, in his book, Harvard Business Review Family Business Handbook, writes, “Even with good intentions, many owners find it difficult to plan their own eventual transition from the business that has become part of their identity. But delaying or poorly planning your transition can wreak havoc on the business in the long run.”

 


Chapter 6: Who Needs Succession Planning and When

It is a misguided assumption that only Fortune 500 companies undertake succession planning. They might have had a head-start in implementing the process, but it doesn’t diminish the need for small and medium-sized businesses. Any company can develop and execute an effective succession plan as it benefits organizations of varied sizes at numerous stages of growth. But one must establish the process to do the job right. 

When is the right time for it, you wonder? Well, here are some experts suggestions to fill you in: 

  • Stewart Dunlop, the founder of Digital Marketing Agency PPCGenius.io, says, “There are numerous reasons to start succession planning as soon as possible. First, a well-designed succession plan will inspire you to work hard to grow and establish your business in a way that it will still hold its worth after you’re no longer a part of it.
  • Trond Nyland, the founder and CEO of Cordless Drill Guide, states, “Succession should begin three years before your retirement. It allows the time to comfortably research and find the perfect candidate. Enough time to teach the company culture and ensure that the new leader embraces it fully. It allows you both to sit down and create 5-year plans and set subsequent goals.” 
  • Dan Bailey, the President, WikiLawn Lawn Care, has a different perspective. He states, “Even if you’re not filling the vacancy of CEO or another C-level position, having a plan for filling management roles benefits everyone and keeps things moving smoothly. Hence, your plan should ideally start before succession is even a consideration, with training people to take over vacant roles.” 
  • According to Drew Stevens, CEO/Managing Partner, Stevens Capital, Succession planning needs to begin immediately. Two reasons a) small business owners need to create a plan when they desire to exit the business or become disabled and b) for public organizations similar to the President of the United States, plans must be in place during a disability or in the case of death. There have been a myriad of CEOs over the years who have passed while in office without proper plans of success, throwing the organization into a tumult.”

 


Chapter 7: What Are The Seven Steps to The Succession Planning Process

Jim Pendergast, SVP of altLINE (a division of The Southern Bank Company), is of the opinion that Organizations have years to plan out end-to-end transitions, particularly for senior and executive staff. There should be an established checklist in place as soon as positions are formed. Without some formal approach ready, even a rough one, you’ll face significant cost creep in your succession process, not to mention enormous amounts of management limbo and stress.”

Below is an insightful, seven-step succession planning process to help you get started with the succession planning procedure.

 

The seven steps of succession planning include:

 

7 Steps to the succession planning process

 

1. Uncovering Key Business Positions

Key business positions are those that are extremely important for an organization’s continuity and success. These positions are significant as either they are too critical to be left vacant for long or are extremely difficult to recruit for.

2. Mapping Key Competencies To Build Success Profiles

This step involves identifying the behavioral requirements of a specific role to find the perfect fit to make your evaluation more streamlined, objective, efficient and effective.

3. Shortlisting Potential Successors

Shortlisting candidates as successors should span the whole organ­i­za­tion. Apart from senior management, you must look across departments, positions and teams for any employee in any area who can be a likely successor.

4. Choosing The Right Succession Planning Tools

Working out the right new tools and systems that must be in place to support the roles derives fruitful results.

5. Assessing Potential Successors

Devising in-depth, robust strategies and exercises to assess whether the nominated candidates have the knowledge, skills and caliber to perform the new role.

6. Charting The Way Forward

Not every candidate is going to be a born successor. Hence, chart out a customized way-forward for each potential’s journey to nurture them to reach a certain level.

7. Act Upon The Decision

Be proactive and implement the succession planning process the minute your hiring begins. What seems like a one-off process is fairly time-consuming, stretching into months or even years. If a sudden need arises, it’s better to be prepared than sorry.

Here is a free succession planning template that supports businesses and employees across any industry or organization to make life simpler. It’ll help you get started on your succession planning process at the earliest.

 

Succession Planning Template

 

Succession Planning tools and Template

 

While many companies look outside of their domain for an ideal successor, we propose investing in your internal talent pool when initiating a succession planning process. It is likely to yield better results.

 


Chapter 8: Succession Planning Tools

Businesses are expected to remain relevant by adapting, innovating and accelerating toward the digital ecosystem. They need to prepare and prioritize their vision, identify vulnerabilities, shortlist pipeline potentials and envisage a path forward. These can’t be undertaken without a leader, a plan or the right tools.

Tools? Yes, you read that right. 

Succession planning tools help determine who amongst a set of employees has the potential knowledge and skill sets to fill in many critical roles. They allow you to navigate ahead by syncing your vision with a suitable leader. By providing in-depth knowledge of essential, work-relevant personality traits and behavioral tendencies of individuals, the succession planning toolkit identifies and prepares top talent for various roles and indispensable challenges for achieving organizational success.  

Here are the succession planning assessment tools one must leverage to the core when instituting a succession planning model :

 

Succession planning tools

 

These succession planning tools and techniques are the building blocks of any assessment. Let’s elaborate on them for better understanding.

1. Personality Tools

In succession planning, it is vital to gain a more comprehensive understanding of personality, of which the management might not be aware. Therefore, companies assess personality traits that are the determining characteristics exhibited consistently despite changing circumstances. 

Personality assessments are commonly undertaken at the mid and senior levels. 

This top succession planning software tool is validated and optimized to test beyond the traditional ‘Big Five’ framework of personality. It provides a comprehensive picture of the culture and role-fitment while evaluating the likelihood of handling integral work-related activities. It also proffers objective insights into how others might react to the same situation. Many state-of-the-art personality tools also measure motivation as it is synonymous with related personality traits such as commitment, accomplishment and enthusiasm.

2. Behavioral Assessment

A behavioral assessment tool requires candidates to demonstrate chosen and critical behavioral competencies in one or multiple exercises that mirror actual workplace situations. It identifies and analyzes behaviors required of employees when they take the lead, professionally and socially. 

A behavioral tool brings clarity on how people behave at work. Hence, they combine innovation and scientific rigor to assess the role-fitment. Different types of behavioral assessments can be used independently or in combination for an individual’s holistic overview. It includes caselets, situational judgment tests and inbox exercises, etc., to gauge an employee’s mindset and potential. Hence, it is ideal for implementing behavioral assessments, such as employee succession planning software.

3. Cognitive Assessment

Cognitive ability is the brain’s ability to undertake core tasks such as thinking, learning, memorizing, paying attention, visualizing, recognizing, organizing and interpreting the surroundings (perception). 

In succession planning, cognitive tests assess critical thinking and reasoning logic related to on-the-job performance. The test measures two intelligent types- crystallized intelligence and fluid intelligence – through a series of complex questions.

 

Succession planning tools

 

When succession planning for top management, cognitive tests help measure leaders’ aptitude to achieve excellence that is aligned with business goals – various research studies have indicated that cognitive ability predicts job performance twice better than job interviews, thrice than work experience, and four times the education level!

4. Technical Assessment

A technical competency framework handbook provides detailed insights into identifying stellar IT/ non-IT skills sets to companies assessing technical roles. Various professional tests provide comprehensive knowledge of the on-job-relevant behaviors and the technical expertise required to be successful.

5. 360-Degree Feedback

Apart from utilizing the four tools above-mentioned, it is advised to gather stakeholders’ perspectives when succession planning. That is because they are the ones with whom the potential successor works and interacts regularly. Hence, seeking feedback from multiple stakeholders such as the employee’s superiors, peers, direct reports, and even clients enables them to understand their perceptions of the employee’s readiness to take on future roles.

Leveraging this information can help the employee develop a more well-rounded perspective on performance, skill levels and behavior as perceived by others. Using a multi-rater feedback mechanism, such as Mercer | Mettl’s 360-Degree Feedback survey, allows one to understand whether the concerned employee has demonstrated leadership qualities. Using this tool as an additional metric to determine the right fit ensures that multiple perspectives are factored in when making the final decision. 

Even the most successful individuals often have flaws that are blind-sided, and various succession planning examples state the same. Hence, it is advised to apply a combination of personality, behavior and cognitive tools to achieve an in-depth measurement of crucial, work-relevant personality traits and behavioral tendencies for individuals positioned in specific high-priority roles. These time-tested succession planning tools can either be administered independently or in a more organized manner through assessment/development centers. We encourage you to read this blog for greater clarity on the subject.

 

Assessment & Development Centers


Assessment and development centers
(ADCs) are scalable, cost-efficient and tailor-made tools that help identify successors across various jobs and levels. ADCs bring together roleplays, situational judgment tests, group discussions, presentations, interviews, simulations, psychometric and aptitude tests, and similar activities to make crucial people decisions. These multiple assessments provide a detailed evaluation of candidates to determine their most appropriate roles. 

The ADC toolkit can be administered either virtually or in a blended format.

Virtual Assessment & Development Centers

A virtual assessment & development center involves employing multiple online tools to evaluate the extent to which chosen participants display select competencies. It is a detailed evaluation of individuals’ role fitment by assessing each person’s various aspects for success in a critical role. With zero logistical hassles, no bias and simple infrastructure requirements in internet connectivity and computers, decision-makers gain a holistic understanding of the candidates through multiple lenses.

Virtual ADC toolkit mostly consists of:

 

Succession planning assessment tools

Blended Assessment & Development Centers

Blended assessment & development centers are a combination of onsite and online assessments. The assessors gain insightful and data-backed outcomes by expanding the means and methods of measuring a potential candidate. This interwoven scenario is a valuable addendum to the repertoire of assessments available, also providing different perspectives on each outcome. Few competencies are mapped using online tools with life-like simulations. The rest are assessed concurrently based on physical activities.  

In addition to the online succession planning software tools mentioned-above, the blended ACDC toolkit consists of:

  • Group Discussion and Group Activities: These are conducted among a select few candidates tasked to work together with all the group members to solve a given problem. Through such group activities, candidates are assessed on social skills, leadership propensity, influence, inclusivity and other values. They are undertaken with assessors as observers who evaluate the candidates on the concerning competencies. Candidates are assessed on active participation, along with their quality of ideas and perspectives. 
  • Case Study Presentation: A hypothetical business-related case study is presented to the participants. This activity takes them out of their regular day-to-day roles. It offers them a glimpse of the problems while allowing them to experience critical interdependencies, execute best practices and explore alternatives to devise an all-embracing succession planning system.
  • One-To-One Roleplay: This activity enables examining how the participants behave with others in a given situation. This exercise allows the assessors to observe how the participants respond when dealing with challenging interpersonal conditions. An individual’s ability to perform well in this activity is likely to directly correlate with the role’s required competencies and behaviors. This is an ideal HR succession planning software feature. 
  • Competency-Based Interview: This interview’s premise is that past behavior is the best predictor of future performance. Hence, a competency-based interview uncovers the participants’ past performance through questions. It highlights their abilities to perform the job.

Each of these succession planning solutions can be administered online and/or in-person, factoring in a myriad of demands of the present-day business environment. These tools are customizable for all employee levels throughout their employee life-cycle, from frontline employees to managers and other senior positions. 

So, which succession planning toolkit are you leveraging for your organization? 

Are you still confused? We understand. All this information can get a tad bit overwhelming. Especially when there is no one-size-fits-all approach, selecting the fight set of tools depending on your requirement does become difficult. Thus, to ensure the management undertakes the best succession and talent management practice that ensues significant benefits, here are a few factors to keep in mind.

 

Factor Affecting The Succession Planning System


Here are
the four most critical requirements or decision- making factors on which banks your choice of succession planning tools:

 

Factor Affecting The Succession Planning System

Let’s explore them in more detail.

Role

The role or title for which you are planning is a crucial factor that affects which succession planning toolkit you would need to shortlist. This is because the profile specifies how complex or simple the tools need to be while deciding. For example, a senior leadership role will require a more comprehensive succession planning system than a junior role. After all, a higher role demands a more thorough assessment of the candidates’ leadership qualities, knowledge, future-thinking approach and actions through the tool.

Industry

Just as every fingerprint is unique, the succession planning requirements of every industry is distinct. For instance, a software firm’s requirements don’t need to be similar to that of a retail firm. While one will need to evaluate technical performance on priority, the other will prefer different skill sets. Therefore, you cannot follow a one-tool-fits-all approach here. Hence, businesses considering employing succession planning tools should comprehend their industry’s goals in sync with their business requirements and dynamic workforce before taking a call.

Time

It is well-known that succession planning is a time-consuming process. It takes time to design and is implemented in the future. Similarly, you need to factor in time to track and evaluate your tools’ effectiveness. Hence, time is a critical factor that helps decide the kind of succession planning tools one can wield in a succession planning model. For instance, the more time you have at your disposal, the greater your advantage is in expanding the tool kit, viz-a-viz someone who needs to fill a role urgently. 

Suppose you are an organization restricted by time. In that case, you can employ virtual assessment and development centers that work in a virtual setting and bring together various exercises and multiple assessments. They are quick to administer and easy to manage within a given time-frame while providing a detailed candidate evaluation.

Budget

Like any organizational initiative, a systematic succession plan cannot be initiated without budgetary considerations. After all, scouting, recognizing, developing and evaluating talent needs financial inputs. Hence, fiscal consideration allows organizations to keep a focussed approach toward the tools availed to implement a succession planning system. That way, depending on your spending capacity, you can employ one or more tools to achieve your goals. For example, if you are a business owner with a small-scale budget, you can employ a readymade set of assessments to achieve the purpose of the succession planning system. Such tests are mapped to pre-defined competencies that are not specific to any organization but cater to a standard succession planning framework, typically used across industries and/or seniority levels.

 


Chapter 9: Case Study

The Mercer | Mettl team recently helped India’s largest engineering & construction conglomerate initiate its succession plan

  • Problem: The firm wanted to objectively identify its high-potential candidates to train them for assuming leadership roles in the future.
  • Solution: Mercer | Mettl’s subject matter experts formulated a solution by creating a customized behavioral assessment and emotional quotient report for screening high-potentials. They covered various critical parameters such as people management, ambition, tactics and learnability. The assessment instantaneously provided detailed insights into candidates’ strengths and weaknesses, enabling the firm to gain a holistic understanding of its talent pool. 
  • Impact: The firm could roll-out a fast and accurate high-potential identification program. It also contributed toward engagement and rewards to ensure that deserving people were invested in and continued with the company.

 


Chapter 10: FAQs

Before you move on, we’ve listed down the answers to some common questions on the succession planning model, succession planning procedures, succession planning templates, and the succession planning strategy.

 

What is succession planning in human resource management?


The succession planning process in
human resource management essentially means initiating a strategically tried out process of identifying the next generation of leaders who can ensure business continuity when key leaders move on to new opportunities, retire or pass away. 

 

Who is responsible for succession planning? 


Succession planning is a decision undertaken by the senior management and board members but is implemented by the human resource team.

 


Conclusion

Nurturing a star talent is always easier said than done. After all, you can’t always be foresighted to identify the right talent and then develop them for precisely what the future may demand. Nor can you rely on instincts to forever make promotion decisions – that you will always have an ideal fill-in and fit-in is just too good to be true. This is why succession planning is a requisite for every organization. It improves the choices we make about employees, business associates, top executives and corporate leaders. It gives us the fuel necessary to deal with an unplanned crisis. The unfolding challenges in what may be a brutally uncertain business landscape, scarred by the experiences of the Corona-induced disruption, necessitates implementing and accelerating the succession planning process for companies. It is best to be future-proof.

For a business, moving forward without a succession plan in place creates uncertainty. Uncertainty promotes disruption and endangers future competitiveness. The goal of succession planning is to maintain continuity and even enhance future operations.

Ethan Taub
CEO of Loanry

Originally published February 24 2020, Updated December 19 2023

Written by

Shirisha has been helping countless brands gain traction with her content. Her deep understanding of the education sector and sound knowledge of technical skills have helped her structure the most creative solutions for key stakeholders. Shirisha has also ghosted pieces for several industry honcho’s successfully published both online and offline. When she's not keeping up with the world, you're sure to find her catching up on bollywood stories or gramming for fun.

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