A succession plan is essentially the identification of the next CEO or the person who could step into that position, right? Wrong!
The process of creating a talent pipeline dedicated to developing the capabilities of potential leaders as well as the people who will fill in behind them is the essence of succession planning. Since this is critical to the successful execution of an organization’s strategic roadmap, an in depth understanding is essential.
What is Succession Planning?
Succession planning is a holistic and ongoing process of identification, assessment and development of potential leaders to ensure that they transition into critical roles across levels. The essential task of this process is to help mitigate organizational continuity risks and establish a robust talent pipeline to ensure the company’s stability & sustainability.
Corporates stand to gain in multiple ways from a steady succession planning program:
- Awareness of available talent pipeline and areas of improvement
- Availability of suitable talent for critical positions on different timelines
- Proactive management of human capital risks
- Competitive advantage due to long term strategy focus
- Prevention of scrutiny from management boards on talent sustainability
- Optimal utilization of managerial time and effort due to the self-sustaining nature of the exercise
The lack of a robust succession planning program exposes organizations to some high risks:
- Critical leadership positions staying vacant, or being filled by unsuitable candidates
- People deployed in a reactionary way leading to inadequate support for business goals
- Induction of bad-fit talent due to haste in filling critical vacancies
It’s therefore imperative that business leaders make succession planning their priority. This sense of urgency can come from various sources:
- Boards focused on an organization’s long-term success
- CEOs cognizant of the stakes involved in neglecting this critical area
- Analysts who question an organization’s sustainability in times of change
- Regulators in financial services, health care, and other industries with strict oversight
- Strategy focused HR heads who want to ensure an adequate talent pipeline
What does a Succession Plan look like?
Succession planning is all about future proofing the organization by developing a leadership team who can navigate through times of change. To be effective, it needs to address all levels in the organization and not just C-Suites.
It is important that a succession plan must never be a commitment for future promotions. This will ensure transparency, reassure employees of fairness and motivate identified successors to constantly up their game to retain their status
How Will Succession Planning Look Like in the Future?
The entry of Millennials into leadership roles will necessitate succession planning at divisional & functional leadership positions. It will also need a change in the ethos of implementation. Here’s why…
- Millennials’ love of transparency will compel organizations to be open and communicative about their succession planning process
- Millennials like their careers carefully planned out and constantly look to develop themselves with the help of feedback. This should be an integral part of succession plans.
- Millennials tend to change jobs relatively frequently, thereby necessitating a review of succession plans at least once every quarter
How Should You Avoid Barriers to Succession Planning?
Every succession planning exercise has to be prepared to face some degree of resistance. Here’s a list of barriers your implementation team is likely to face.
- Fear of Commitment: To avoid a sense of expectation and entitlement in candidates, leaders must make the process transparent and communicate that there are no guarantees
- Fear of the Unknown: To overcome top leaders’ resistance to identifying successors (as it forces them to consider their own retirement and beyond), succession planning should be approached as an organizational risk mitigation exercise
- Reluctance to Allocate Resources: Buy-in from top management is essential to secure resources – time, money, technology – for this process
- Fear of Complications: The pitfalls of heightened emotions and subjectivity should be avoided by deploying technology to automate assessment and performance data analyses
Succession planning need not be an uncomfortable subject. Empower it with science and research to make it a fast, neutral process that provides a clear path for continuity & excellence. For an in-depth perspective, read Aon’s white paper on Succession Planning here.
To get started, you can contact one of the contributors to this article listed below or contact us at email@example.com.
Partner – Leadership & Assessments
Aon Hewitt India Consulting
Aon Hewitt India Consulting