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Not too long ago, India’s industry titan Ratan Tata made a rather abrupt return to take the reins of TATA Sons at 78. We may skip the details of what led to an unpleasant situation, but the unfolding events did indicate the lack of a well-thought-out succession plan in the company. But such ‘comebacks’ have also been made in other conglomerates. Media giant Disney faced a nightmare when Bob Iger stepped down at 69.
In both these succession planning examples, the respective board extended their tenures and requested them to reassert their control to reverse the fortunes of their business empires. Such steps may avoid an impending headwind and be perceived as stop-gap solutions. However, they are no substitute for a viable long-term strategy chalked out by a company’s management. After all, these leaders, no matter their stature, would inevitably make way for the younger generation. You cannot retain the best talent forever! Hence, a timely understanding of who can match or outperform the existing top-tier executives is critical for your company’s sustained and long-term growth, perhaps intrinsic to its vision. It would ensure a healthy talent pipeline. The lack of such a process can even cause existential crises for companies, let alone its impact on investors, analysts, employees, customers and other stakeholders.
Facilitating succession planning best practices is one of the essential components of broader human resource planning. It is akin to keeping indispensable employees tethered to the business and a critical mandate for the CEO and board members. Numerous advantages of succession planning strategies ensure peacefulness and allow you to focus on expanding your business and generating more revenues. Various succession planning strategy examples and numerous succession planning best practices case studies reiterate the same.
The succession planning process is a detailed and vital undertaking to identify people who could immediately, or after targeted development, assume key positions. It is a well-documented plan for management succession at all levels, especially when filling leadership roles, mission-critical positions or niche roles.
Succession planning procedure ensures that a company rises above dynamics, personalities and internal alignments when concerns arise.
This decision wasn’t an intuitive call. The development at JP Morgan underlines the importance of a succession plan and selecting the best people to steer a company toward the future to ensure continuity.
And while many companies may scout for an ideal candidate outside of their domain, we propose investing in the internal talent pool. It is likely to yield better results.
Most often, successors have big boots to fill, and it is no breeze. You must get the steps and the process right for the desired outcome.
So what should a succession plan include? What is needed for succession planning?
Here are 7 insightful and actionable succession planning steps that you can employ for any position or title. These steps have helped us make the succession planning framework a more relevant process for several leading companies.
So spring into action if you also wish to identify and shortlist your next-in-line. You’ll love this list of succession planning strategies that’ll help you maintain continuity and even enhance future operations.
The Seven Steps of Succession Planning Include:
Key business positions are extremely important for organizational continuity and success. These positions are significant because either they are too critical to be left vacant for extended periods or are extremely challenging to recruit for.
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.
Shortlisting candidates as successors should span the whole organization. Besides senior management, look across departments, positions and teams for any employee who can be a potential successor.
Working out the right tools and systems that must be in place to support the roles derives fruitful results.
Devising in-depth, robust strategies and exercises to assess whether the nominated candidates have the requisite knowledge, skills and caliber to perform the new role.
Not every candidate would be a born successor. Hence, chart out a customized way forward for each potential’s journey to nurture him/her to attain a certain level.
Be proactive and implement the succession planning process the moment your hiring commences. What seems a one-off process is time-consuming, stretching into months or even years. In case of an abrupt need, it’s always better to be prepared than sorry.
Let’s elucidate these steps for you.
A successful pipeline begins with identifying and elucidating all critical organizational roles. They are in tandem with the company’s vision, growth plans and long-term viability. But how do you term which role or team is succession worthy? There are three ways to find out.
These are the three ways to identify your key roles and determine the credibility and the potential of roles to steer your business in challenging circumstances. Now, contrary to popular belief, executive-level positions or C-suite roles aren’t the only significant positions in a company that needs successors. Middle-management functions, R&D, sales and marketing, liaisoning departments with scarce workforce are equally important.
Competency mapping in succession planning process steps involves identifying the knowledge, skills, and behavioral requirements of a specific role to find the perfect fit. A majority of companies flounder here, as they focus on leadership traits than on role requirements. Therefore, the emphasis here is on the targeted role.
Now, understanding the role’s competencies is crucial when determining the best talent. It serves as an objective and structured set of criteria against which potential successors are evaluated. This process helps create a strong foundation. The process is popularly called ‘creating success profiles’ in the corporate world. It is a decision-making roadmap focussed on what is needed from a role.
The success profile/competency framework highlights the necessary current and future personality attributes, cognitive abilities, behavioral preferences and leadership skills to perform a role. Your evaluation is streamlined and objective once you gain clarity on the pointers mentioned above. Afterward, a meticulous non-negotiable competency list is laid out, considering the changing environment. It is an ideal means to drive efficiency, effectiveness and performance. Competency mapping can either be done by the organization via focused group discussions or visionary interviews.
Once you’ve created a well-defined list of key roles and critical competencies, it is imperative to understand which employee is the ideal successor for the given role. But how do you identify successors in succession planning? There are a few ways to identify them.
Key Tip – Performance isn’t the only factor that determines your future leaders.
A practical and successful succession plan can only be implemented with the right set of tools for assessment. But the marketplace is filled with seemingly endless options, making tool selection a tad difficult. Hence, consider the following to best identify the right tools for your organization:
These three processes bring much clarity in identifying the right succession planning toolkit, which will bring you closer to ascertaining an organization’s potential succession gaps and enable you to plan for future staffing needs.
We suggest that the building blocks of any assessment begin with the application of personality, behavior and cognitive tools. The right mix of these tools can help garner in-depth measurement of an individual’s work-relevant personality traits, behavioral tendencies, and reasoning and problem-solving skills. Many state-of-the-art tools also measure motivation as it is synonymous with related personality traits, such as commitment, accomplishment and enthusiasm.
Did you know?
Mercer | Mettl’s ‘Mettl Personality Map (MPM)’ measures personality via a unique and innovative 28 facet and a 4-factor structure of personality beyond the traditional framework.
The process of assessment commences after the client approves of the succession candidature and competency list. There is no shortage of skills and abilities required to be demonstrated at the highest levels. Therefore, the assessment is:
Here are some examples of elaborate assessment activities that are viable indicators of future performance.
A comprehensive group of standardized or customized assessments can quickly enable organizations to zero in on their successor. These assessments are mapped to the organization’s competency framework or specific needs using a combination of personality, behavior and cognitive tools to provide an in-depth measurement. With evidence-based assessment, companies can seek an in-depth measurement of critical, work-relevant personality traits and behavioral tendencies. Each test is benchmarked globally to find stable results across gender, age, language and ethnicity. Assessments can either be administered independently or as a part of the Assessment Center and Development Center (ADC).
Assessment centers help organizations to identify whether the shortlisted candidate can handle the challenges in the desired role. Exposure to complex problems fine-tunes the growth process. Therefore, leaders learn about their gaps and requirements to lead effectively by replicating real-life scenarios and using simulations to make assessments as authentic as possible. State-of-the-art proctoring tools can also be used to support the integrity of the assessment process with real-time observations and feedback.
Virtual assessment development centers involve employing multiple online tools to evaluate the extent to which chosen participants display selected competencies. It is a detailed evaluation of individuals’ role fitment by assessing them on various aspects required to succeed in particular roles. Decision-makers gain a holistic understanding of the candidate through multiple lenses, with basic prerequisites, such as internet connectivity and computers.
Blended assessment centers are a combination of assessor-based activities and online assessments. Each competency is mapped to online tools with life-like simulations and assessor-based activities. Assessors gain insightful and data-backed outcomes by deploying various simulation-based activities and expanding the means and methods of measuring a potential candidate’s readiness/fitment. These inputs, along with standardized and customized online tools, allow factoring in different perspectives in the outcome of each competency.
With a wealth of information at your disposal, it is now time to chart the next course of action for your candidates. Advanced analytics and post-program assessments empower your organization to track the identified successors on their standing in the readiness journey to become future leaders. A real-time customized report, called the integrated competency-based report, has answered various questions about each candidate’s performance, readiness and potential. You have overall scores, tool-wise scores, and the IDPs for the competencies identified as development areas, which has given an improved understanding of the talent pipeline available internally while creating awareness of the current individuals’ strengths.
You now need to decide on how to leverage the information.
You must understand that even if you identify your potential candidates, it is not imperative they would be ready to take the mantle. They might still need some mentoring and skill development before they’re ready. Similarly, what will happen to those candidates who didn’t make it to the list? Their performance metric has laid out their abilities and vulnerabilities in detail. As management, you need to take a call on how you plan to enhance their existing abilities. Whether it is sharpening their skill or expanding their knowledge and abilities, even if a succession doesn’t happen, it’s good to prepare them for higher roles if you feel they’d be a good fit. Hence, you should chalk out a dynamically-tailored way forward, considering every individual’s standing on concerning competencies.
According to the Rocket Lawyer survey, 72% of business owners have no succession plan. And we can’t begin to explain the levels of jeopardy in which this lack of initiative puts your company and its stakeholders. Succession planning shouldn’t begin at a certain time as succession occurs all the time within a company or business.
You ought to put an end to uncertainty and tremendous risks and start the process of succession planning now, not tomorrow, not in the future. Only then, in case of any unforeseen or unexpected requirement of vacancies in the near future, essential job roles can be filled without delays. You should initiate it with your hiring plan to ensure a seamless transition. If you are a startup, lay the groundwork of this overwhelming process as you take-off to maximize the value it brings to you in the long-run.
Ready to get started?
People often ask whether there is a succession planning template or about the time needed for undertaking succession planning. A succession planning strategy isn’t a one-off process. It can’t be done once in a company’s lifetime and then not looked at until a situation arises. Succession planning is an on-going process and starts early. It is undertaken, at least, a few years in advance. If potential successors need training or development, there should be sufficient time to expose them to the firm’s full spectrum of opportunities. According to a global authority on talent and leadership, Claudio Fernandez-Araoz – the art of great ‘who’ decisions–marks the difference between success and failure. Judging someone in a leadership role depends much on their responsiveness and the ability to do things.
In today’s complex business landscape dotted with economic uncertainties, even a year ago, we never envisaged dealing with the new ‘normal.’ How do you plan to manage this abnormal yet new normal? What is your edge? Having the right leadership pipeline, poised to seize every opportunity, would be your primary differentiator.
Before we wrap up, we’ve listed down the answers to some common questions on the subject and related terms such as succession planning best practices 2020, succession planning best practices 2019, succession planning strategies meaning and succession planning strategies definition.
Here’s how you prepare a succession plan:
An effective succession planning means having a ready-to-go list that helps put succession planning strategies meaning into perspective. Whether one is creating succession planning strategies for a family business, succession planning best practices for nonprofits, or farm succession planning strategies, the same steps can be used to prepare an effective succession plan.
Here’s how you ensure succession planning:
The first step in succession planning is uncovering key business positions, which is extremely important for the organization’s continuity and success. These positions are significant because they are too critical to be left vacant for long or are extremely difficult to recruit.
You can measure succession planning by comparing your attrition and retention rate amongst key talent and by understanding the time it has taken your HRs to fill in key positions. Don’t forget to analyze your hiring costs as well.
The succession planning process in HRM 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.
The four stages of the succession planning process are:
Here’s how succession planning can be improved:
Originally published July 24 2020, Updated July 23 2021
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.
Succession planning is a systematic process through which organizations build a leadership pipeline to preserve its future. The process involves identifying and developing potential successors for a seamless transition.