In today’s fast-paced business environment, change is inevitable. Whether due to retirements, promotions, or unexpected departures, leadership transitions are bound to happen. These changes can disrupt work and slow growth without a plan. How can you guarantee your people feel ready when the time comes?
Proactive succession planning can help your organization navigate these transitions smoothly. Succession planning strengthens operational health by preparing existing team members for leadership roles.
Let’s explore how a well-crafted succession plan can support leadership transitions, boost morale, and ensure long-term business success.
What is succession planning?
Succession planning is an HR process that prepares people for future roles to support continuous business functioning. Succession planning offers long-term, strategic solutions that buffer both large and medium-sized businesses against inevitable future disruptions or sudden job vacancies.
Usually spanning one to three years, succession planning involves training and educating people so they can assume new positions with confidence and poise.
What is HR’s role in succession planning?
Succession planning can feel like training a competitive basketball team. A bench player can jump in as a replacement when a first-string player gets injured or needs a break to continue the game seamlessly. Similarly, HR leaders train people to fill various positions in the company, supporting smooth functioning during departures, transfers, or promotions.
Why is succession planning important?
Companies risk disruptions when key team members retire, move on, or transition into other roles without a succession plan. Succession planning guarantees a pipeline of capable leaders who step up when needed.
Organizations avoid last-minute scrambles and maintain operational stability while empowering team members with opportunities to advance. A proactive approach reduces the risk of unplanned headaches down the line.
Succession planning example from Apple
Apple used succession planning when transitioning from Steve Jobs to Tim Cook. When Jobs became aware of his health challenges, he carefully identified and then prepared Cook for years so he could successfully succeed him as CEO.
During Jobs’ medical leave, Cook served as Chief Operating Officer and demonstrated his leadership abilities. Apple maintained its growth and continued to innovate while staying true to the company’s vision under Cook’s leadership.
Benefits of effective succession planning
Filling the talent pipeline with trained people can benefit a business in many ways, enabling it to:
- Decrease hiring expenses
- Reduce time-to-hire and time-to-fill
- Support continuous workflow despite disruptions
- Promote engagement and employee retention
- Have higher performance
- Plan and prepare for retirement
Why succession planning is important for your people
Investing in the future growth of your team enables individuals to:
- Feel a sense of purpose in the organization
- Boost their confidence in their skills
- Feel more motivated to engage with the team
- Increase overall retention to reduce turnover
How succession planning impacts diversity
Succession planning helps organizations meet their DEI&B goals. Because succession planning allows organizations to strategically develop people to prepare them to take on more responsibility and higher positions, it removes barriers to internal advancement that may exist because of implicit bias. By making an effort to plan for the promotion of candidates from diverse backgrounds, you can ensure that you maintain equity throughout all levels of your organization.
How the succession planning process works
Succession planning can look different from organization to organization, but the general process will typically require the following steps:
1. Predict your organization’s future needs and goals
Succession planning begins with predicting where your organization will go in the next few years. Consider upcoming retirements, potential promotions, and the future direction of your business. Use historical data on turnover rates, industry trends, and growth projections to forecast which roles may need successors.
For example, if a key leader plans to retire in the next two years, you can identify potential internal candidates and plan their development before the change.
2. Identify critical and vulnerable positions in need of successors
All roles are important, but some are more disruptive when left unfilled due to their complexity or lengthy replacement time. Focus on identifying roles with significant decision-making power, such as executive leadership or department heads. Consider positions with specialized or niche skills that are difficult to replace.
3. Define a timeline, KPIs, and budget
Once you have a clear sense of direction, it’s time to plan the road ahead. Define specific milestones, such as when potential successors should complete certain training programs or hit key performance targets. For example, set a goal for a department manager to complete leadership training within six months and shadow a senior leader for three months to gain practical experience.
A well-planned budget will allow you to allocate resources efficiently for training costs, leadership development programs, and updated compensation packages.
4. Develop a profile of each position
Create detailed profiles of the critical positions and their performance expectations to determine eligibility requirements. Include core responsibilities, key performance indicators (KPIs), technical competencies, and soft skills.
For example, when profiling an HR director, you’ll look for someone who can:
- Develop and execute HR strategies aligning with overall business goals
- Act as a mentor for HR managers and business partners
- Encourage the growth of team members
- Recruit top talent for high-level and executive roles
- Mediate escalated team member disputes
- Prioritize positive company culture
You can also add skills like:
- A strategic eye for big-picture development
- Expert understanding of labor laws and regulations
- Strong budget management capabilities
- Ability to use data to inform decision-making and measure HR effectiveness
5. Determine which positions can transition into the successor position
Not all roles lead to a critical position directly, but some serve as ideal stepping stones. Evaluate which positions naturally propel to leadership roles and which teams or departments typically supply top candidates.
If you’re filling the HR director job above, review a typical HR career path to identify which roles may lead to the director position, like an HR manager or HR coordinator.
6. Evaluate people’s competencies
Perform competency evaluations that measure current team members’ leadership potential, technical skills, and readiness to step into new roles. Use 360-degree feedback, leadership assessments, and performance reviews to provide valuable insights.
A great performance management strategy can make it easier to uncover candidates that may have gone unnoticed. Try a 9-box model to assess performance and identify individuals who align with your leadership profile and show strong potential for advancement.
<<Download a free performance template for seamless evaluations.>>
7. Nominate successors from the qualified positions
Once you’ve evaluated your team’s competencies and identified leadership potential, nominate the most qualified individuals for succession roles. Providing multiple options helps ensure flexibility and allows for changes in availability or circumstances. Clearly explain how you selected the nominees and share performance and leadership potential data you used.
8. Implement a learning and development program
A learning and development program nurtures and gives your nominees the best chance at success in their new roles. Examples of learning methods include mentorship programs, on-the-job training, online courses, shadowing current leaders, and leadership workshops. These programs allow nominees to work out any kinks in their technical skills and leadership competencies before they take full reigns of their new role.
9. Manage individual talent development plans for all high-potential succession candidates
Develop a personalized talent development plan for every candidate that outlines their path to leadership. These plans can include measurable goals, timelines, and specific skills to develop. Regular check-ins, mentorship, and progress assessments ensure that each candidate stays on track and receives the necessary guidance to succeed in their future role.
10. Assess succession planning results
HR leaders can use key succession planning metrics to analyze the program’s effectiveness following completion. Metrics might include the time it takes to fill key roles, retention rates, and readiness.
Revisit and update succession plans based on changes in business goals, industry trends, or individual performance. Flexibility will keep your leadership pipeline aligned with your organization’s future direction.
Succession planning best practices and mistakes to avoid
HR leaders play the biggest role in ensuring the succession plan satisfies company needs and people’s career objectives. The following best practices can help you create an effective succession plan that promotes employee-employer alignment:
Use a succession planning template
HR leaders can use templates to create comprehensive and proactive succession plans that avoid unplanned downtime and boost morale. They provide a clear framework for critical steps like identifying new roles, assessing skill gaps, and setting timelines.
When your people see there’s a smooth plan in place for every big change, they’ll feel more certain about their workplace’s future.
<<Download free succession planning templates to build an effective succession plan.>>
Prioritize transparency and communication
Regularly discuss succession plans with your team to keep them informed about possible development opportunities. Help your people understand the criteria used for succession planning—and how they can position themselves for future leadership roles.
This transparency builds trust within the organization and builds confidence in its future so everyone feels secure in their career paths and the company’s long-term success.
Integrate succession planning with talent management efforts
Use performance reviews, development programs, and leadership training to identify and nurture future leaders. This approach ensures your people consistently grow in line with your organization’s needs. The right candidate may reveal themselves as you continually monitor their progression throughout the year.
Begin with a trial program
Instead of jumping into the water unprepared, HR leaders can get their feet wet by initiating an experimental succession plan. This introductory program can integrate a smaller pool of individuals as HR tests the waters. This allows leaders to fine-tune the process and learn what works before rolling out the plan across the entire team.
Use succession planning to improve your company culture
Preparing for unavoidable changes within the workplace through succession planning can help maintain a steady business. Succession planning empowers people, elevating their competencies, confidence, motivation, and loyalty. The organization, as a result, benefits from high-performing, knowledgeable, and engaged personnel. Investing in training and career planning strengthens the flow of growth and productivity, contributing to a positive and robust company culture.
<<Start your success planning on a strong note with these succession planning templates.>>
Succession planning FAQs
Who is responsible for succession planning?
Typically, HR leaders and senior management collaborate on succession planning to identify future leaders and ensure the plan aligns with long-term company goals. Your people can also take active roles by expressing interest in development opportunities and working toward leadership readiness.
How much does succession planning cost?
While succession planning may require an initial investment in time and training, successful succession planning can reduce hiring expenses and downtime.
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What succession planning tools are available to employers?
Employers can use career path templates, performance management software, and learning management systems to streamline the succession planning process. These tools help identify potential leaders, track progress, and provide development opportunities.
What is a succession planning model vs a succession planning framework?
A succession planning model outlines the overall strategy and goals for leadership transitions. A succession planning framework provides detailed steps for execution, such as role-specific development plans, skill assessments, and training programs. Both work together to build a comprehensive succession plan that ensures seamless transitions.
