Succession planning is a business strategy companies use to identify and nurture employees toward organizational leadership roles.
Succession planning aims to ensure a pool of talented and capable individuals available who can step into leadership roles when required. It helps with the smooth transition of leadership and encourages a culture of leadership development in the organization.
It involves assessing the existing talent pool in an organization and identifying employees who show potential to do well in leadership roles. The organization can then develop and implement programs to help them acquire the skills and experience for future roles.
Succession Planning and Training and Development are essential organizational processes that involve identifying and preparing potential leaders while fostering the growth and skill enhancement of employees for future roles.
Different types of succession planning exist based on the approach. The key types are given below.
1. Comfortable Approach: A comfortable approach is more informal and is usually left to a small group of people in leadership positions who select successors based on what is important to the organization. This approach helps maintain the organizational culture but can lead to missing out on hidden talent in the company.
2. Compliant Approach: This approach to succession planning follows standardized processes and is more structured. It is based mainly on objective data and a set of criteria or work activities.
3. Competitive Approach: This approach to succession planning is more rigorous and based on substantial processes as well as objective criteria to evaluate candidates. It usually identifies a group of high-potential employees and involves rigorous assessments and development programs.
4. Centered Approach: This more balanced approach involves people, including leaders and potential successors. It combines objective processes with decision-making and a more personal or people-centered strategy. It makes employees feel more engaged and allows for more organizational talent development opportunities.
Various factors to be considered for succession planning include the following:
1. Hiring and Recruitment: The idea is to select candidates who show leadership potential. An experienced candidate may be hired based on the potential they show.
2. Training: The development of skills, company knowledge, and work experience play an important role in the succession process. Training may involve employees trying out different positions in different organizational departments.
3. Mode of Replacement: The mode of replacing the leaders is another factor to be considered. There are different ways this can be done. For instance, in a partnership, each partner can purchase a life insurance policy in which the other partner is a beneficiary.
Another mode of replacement is through an emergency succession plan. This is a plan put in place for when a leader needs to be replaced unexpectedly. A long-term succession plan helps the company account for anticipated leadership changes.
Succession Planning tools are utilized to effectively manage and streamline the process of identifying and developing future leaders within an organization, ensuring smooth transitions and continuity through Training and Development initiatives.
The key benefits of succession planning are given below.