Many companies look at succession planning only at the executive level – something that C-levels submit to the board once per year. This approach makes it easy to fall into a routine that does not reflect the reality of business today. It puts companies into the dangerous position of scrambling to find good talent when a valuable employee is promoted or takes a leave of absence.
There are many reasons to build a solid succession-management process. A competitive employee-driven market means employers are struggling to fill vacancies with qualified talent. Baby boomers are retiring in huge numbers (about 10,000 per day), leaving many vacancies in senior positions.
Employers will face new industry-disrupting regulations in the coming decade: employer healthcare, cybersecurity, net neutrality, consumer privacy, mobile data regulation, and more. Emerging technology such as IoT/M2M, near field communications, and consumer geolocation require a very different skill set and strategy than what would have worked even just 5 years ago.
Succession planning is not complicated, but it does take some time and analysis. To build a robust succession planning program that aligns current talent development with future leadership demands, follow these five steps:
5-Step Action Plan:
1. Identify which jobs need in-depth succession planning.
Some roles naturally have a large pool of internal candidates who could step in seamlessly (for instance, a lead engineer role in a team of several dozen engineers). For other roles, losing the employee would cause a crisis. Many large companies use a third party to conduct a risk assessment of the organization as a whole. Smaller companies can often assess their own risk.
2. Evaluate the purpose of each job.
Start high-level. Each job should have a clear role to play within the company’s strategy. This role should align with the employee’s performance review goals.
3. Identify mission-critical job functions.
In the case of succession, it should be clear what the successor will need to accomplish on a daily, quarterly, and annual basis. Document these tasks, and make sure that critical information and processes are not “locked up” in the current employee’s head.
4. Have candidates ready to fill gaps.
An “irreplaceable employee” is a big red flag. Managers should be concerned when there is no internal candidate to take the reins if a key employee suddenly left or took an extended absence. Potential strategies for addressing succession risks include grooming internal candidate pools and building trusted relationships with outside recruiting firms.
5. Keep dialogue open.
Good communication should already be part of company culture. It facilitates problem-solving (while bad communication leads to employees becoming frustrated and leaving). Give employees opportunities to open up honestly about their plans for the future. Good listening may save the company tens of thousands of dollars down the road.
Accept that some things will change, and mistakes will happen.
Not only is it impossible to find the perfect “plug-and-play” carbon copy replacement, it is a bad strategy. A successor will face different goals and market challenges. There will be differences in personality, work style, and career experience. All of this is necessary for an organization to grow and change.
Do not make emotional or rushed decisions. Take a methodical approach.
It is much easier to do the planning ahead of time, instead of waiting for a crisis to hit when tensions are high. Succession planning often gets bogged down in politics, especially when evaluating internal candidates. The bottom line is that a successor will need to reach a set of goals set by the company. Either an internal candidate can get the job done, or they cannot. Politics have to take a back seat.
Look beyond succession.
An in-depth analysis is a good opportunity to address other employee-level issues, such as lack of training or poor documentation practices. For instance, a competent employee may keep all the information in their head, but the team would be thrown into chaos if this employee were suddenly absent and left no paper trail.
Building a strong succession plan is a time investment, but the benefit is that it keeps the organization strong and focused on achieving its goals. Blue Signal evaluates succession plans free of charge—contact us at email@example.com for more information.