7 tips for an effective succession planning strategy
Do you have a succession planning strategy in place?
There will always be an ebb and flow of talent in any business. The transition of people in and out of your business is a constant given.
As business demands change, roles change; as peoples’ circumstances change, their employment needs change. You’ll always have vacancies that need filling.
Some roles are more pivotal than others, however, and they can’t be left vacant for too long without an adverse effect on the business.
A succession planning strategy is more than just identifying a successor
A succession planning strategy is how most companies mitigate the risk for these types of roles.
It’s nothing new. Certain individuals within a business are usually ear-marked to take-over a senior position if or when the current incumbent leaves or retires. They are the successor.
However, there is a lot more to a succession strategy planning than just identifying a potential successor.
Deciding which roles within a business should have a succession plan in place is crucial. Many businesses are realizing it shouldn’t just be the top-level positions that are succession planned.
Crucial roles exist across the breadth and depth of a business, and with the war on talent, succession planning is an attractive quality that millennials and Gen-Z value in a prospective employer.
Over 90% of younger workers (18 to 34) said that working at a company with a clear succession plan would improve their level of engagement, in a survey by Software Advice.
How to create a succession planning strategy, and who should be responsible for the succession planning, is also vital.
HR and People leaders are well positioned to play a key role in the successful implementation of succession planning.
HR and People teams can put programs in place that enable business leaders to make more informed decisions about their people and help effectively communicate the succession plans. Ultimately, communication is the often overlooked piece of the succession planning pie.
Research by Deloitte highlights a lack of clear communication as one of the biggest threats to the successful transition from one generation of business leaders to the next.
Careful consideration must be given to the nature of how and when succession planning is communicated.
Too soon and it can cause unnecessary disruption and unease; too late and whispers and rumors will abound which can cause more harm than good.
Here’s how HR and People leaders can effectively build a succession planning strategy, and communicate succession plans in their business.
1. Timely communication – successor first
Don’t follow the age-old mistake of identifying a successor for a key role within your organization, but never telling that person.
Research by insurance company MassMutual reveals that 25% of employees in line to take over a small business aren’t aware they are the chosen successor.
Bosses too frequently utter the words, ‘But I had great plans for you’, when the ear-marked successor hands their notice in.
If the successor isn’t informed that they are in line to take over a key role within your organization, then they are very likely to look elsewhere as they seek career advancement.
Informing the identified successor that they have been ear-marked for a future role opens a conversation with the employee to establish if they are even interested in a future with the company, and how they feel about the intended role.
It not only shows the employee they are valued, but that their career development matters.
They will feel more engaged and likely to stay with the company longer.
2. Establish who needs to know what and when
When it’s announced that a key player within a business is due to leave, particularly a well-liked, highly valued team leader or senior manager, it can cause uncertainty among the rest of the employees.
‘Who will take over’, ‘will they change things’, ‘will they have a similar management style’, ‘what will it mean for my role’ are just some of the myriad of questions your employees are likely to be thinking.
If a clear successor has been identified and lined-up ready to take over – and communicated to – it’s a good idea to share the news of the successor with the rest of the business as soon as possible.
The longer people have to digest the news and get used to who the new person is, the better. People by nature don’t like change, so a longer transitionary period is always beneficial to both the business and your employees.
However, if it’s a slightly sensitive departure, or the successor is not 100% bought-into taking over, it may be wise to delay informing everybody straight away.
Sometimes there is a strong case for telling a few key team members or senior managers about a successor first, and then when the successor and their new team are happy, the rest of the business can be informed.
This is where HR and People leaders can help guide the transition and advise on who needs to know what and when.
3. Balance transparency with confidentiality
Succession planning can often incorporate sensitive issues, so it is crucial to balance transparency with discretion.
As well as considering who needs to know what when, consider: does everybody need to know everything about the succession plan, and if so, do they all need to necessarily know at the same time?
Getting your C-suite and the successor to agree which types of information can be shared internally or treated as highly confidential is a good action for HR and People leaders to steer.
Taking time to assess who needs to know what is essential.
4. Convey a fair selection process
Often it can appear to employees that someone internally has just been handed a role on a plate, without any formal selection process or succession plan, particularly if the role wasn’t advertised.
Depending on the nature of the role and size of the company, it can be advisable to announce the vacancy internally at least, to give other team members a chance to put their name forward for the role.
Or, it may suit your business better to share your formal process and criteria for choosing successors.
This could be shared on a need-to-know basis or only if other employees ask, rather than broadcast across the whole business.
There’s no right or wrong way to do this, but it can build trust and boost engagement if as a business you can share the reasons that a successor was chosen.
5. Regularly review the succession plan
A succession planning strategy shouldn’t be viewed as a one-off document or plan that’s made, and then not looked at again until the time arises for it to be actioned.
It may be that the employee your C-suite identified as the natural successor some time ago, is now no longer with the company, or perhaps not quite the right fit for the role if the business demands have changed.
As businesses evolve, the responsibilities and requirements of particular roles and departments can shift. It may be that you don’t need a like-for-like replacement when the current incumbent leaves.
A six-monthly review of your company’s succession plans for all the key roles identified as requiring a succession plan is a wise idea in today’s fast-paced markets.
HR and People leaders should work with the senior management to envision alternative business and organizational scenarios for when a position becomes vacant.
Team leaders and managers will have ideas about how things could work when a position becomes vacant; get those ideas on paper, and then look internally to develop succession talent pools against the most likely scenarios.
There may also be new high-performing team members who have come onto your C-suite’s radar that they now want to consider for some of the succession plans, so again, a regular review of the plans with the senior management team to look at the up and coming talent in the company is a valuable use of time.
HR and People leaders can schedule and lead these reviews to ensure they do happen and record the outcomes.
6. Highlight the career development aspect
Being an organization with a clear, well-managed and regularly reviewed succession planning strategy shows employees that there is a clear, thought-out process to succession planning and career development at your company.
It enables employees to understand that there will be opportunities for them to advance through the ranks and can encourage employees to go the extra mile to ensure they are seen as a high performing individual – so they can be considered when the time comes to review the current succession plans.
The Software Advice research highlighted that 62% of employees surveyed said they would be ‘significantly more engaged’ at work if their company had a succession plan.
7. Use People Analytics and People Science to inform decision-making
People analytics is vital for identifying which roles require succession planning, and who may be likely contenders as successors.
Its important organizations use people analytics and People Science to inform decisions. That way, HR and People teams have all the information needed at their disposal for fair decision-making.
This also gives HR and People leaders a way to add further credibility to a succession plan strategy, when speaking to the C-suite.
Use succession planning to boost morale and drive engagement
Ultimately, the aim of a succession planning strategy is to future-proof the business and mitigate risk when key people leave the business, ensuring the company keeps moving forward in a productive manner.
Savvy HR and People leaders can position themselves as the succession planning strategy and communication experts, advising the C-suite on when and how best to convey key messages around the company’s succession plans.
Like all communication, there is an art to delivering it successfully, and succession planning is no different.
It can be a sensitive subject but handled effectively, it can boost employee morale, drive engagement and improve retention.