The Secrets to Building and Managing an Effective Succession Plan

Posted by Rick Yvanovich

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Dominic Barton, global managing partner emeritus of McKinsey once commented on the importance of having a well laid out succession planning in an interview with Forbes: “There’s never been a more important time for leadership because of the volatility in the world today.” Yet, many businesses continue to ignore its importance and choose to march on without any formal succession plan in place.   

Tips on Building and Managing an Effective Succession Plan

Building a succession planning from scratch 

Many mistakenly assume that only C-level executives need a succession plan. As a result, middle managers are often overlooked, which is a huge missed opportunity and can potentially lead to disastrous consequences. 

Read more: Succession planning – The myth can’t blind you 

Look around your office and ask yourself these questions:  

  1. How many of the people doing middle management work are 50 or over?  
  2. How long will they remain with you?  
  3. Who will replace them?  
  4. How will you identify the replacements?  
  5. What will you need to do to prepare them? 

A good succession plan enables businesses to continue their operations without any disruption due to missing suitable leaders. 

Placing the right people in the right job is difficult enough, maintaining a pool full of these high-quality talents for the purpose of fulfilling a specific management position in the future is not an easy task. That's why succession planning is a serious business. 

There are four phases to a succession plan: 

  • Identification - the process of identifying the key critical roles within the organisations, as well as the potential successors for each role. 
  • Assessment - examine the Potential and Performance of each candidate for each role. 
  • Development - further enhance the successor's competencies to help prepare them for the role. 
  • Management - the succession plan has an impact on the organisation; the execution of the plan needs the collaboration of both the HR department and the leaders to ensure its effectiveness. 

For a more in-depth understanding of these four phases of succession planning, please refer to Succession planning – The FAQs you need to know 

Choosing internal vs. external successors

When outlining of a succession plan, the stakeholders tend to ponder upon whether to hire people from the outside for the job or to keep everything internal. 

On one hand, recruiting outsiders do bring many perks. Primarily, they already possess the needed skills and experiences for their roles. However, it takes a much longer time for him/her to get used to the new organisation. 

On the other hand, internal candidates have been with the organisation for a while, they know the culture, the products, the customers, etc. They also possess well-established relationships with other employees, as well as a proven track record of performance and success with the company. 

Read more: Leadership development – What can we learn from Toys-R-Us failure? 

Whatever your choice is, TRG hopes you start with your internal resources first, before making the decision. Considering internal candidates in the succession can and will result in: 

  • An ongoing supply of well trained, broadly experienced, well-motivated people who are ready to step into key positions as needed.  
  • A cadre of desirable candidates who are being integrated into the company, with positive goals established for them individually.  
  • A flow of capable people throughout various departments with the goals of educating them into the culture and processes of the company.  
  • Defined career paths, which will help the company recruit and retain better people.  
  • The continuous input of ideas to improve the internal processes and procedures of the company, as well as opportunities to improve the offerings and services of the company in the marketplace. 

7 questions to ask before building a succession plan

To be "succession planning-positive" and before starting the project, take a look at your organisation and ask the following seven questions: 

  • Performance. What does successful performance look like at all levels of the company?  
  • Talent. How do we define what true talent is? What per cent of our workforce are truly talented? How much would it hurt if these people left?  

Read more: Why is collaborative leadership important? 

These "conversation starters" hopefully can help to kick-start a robust discussion among the senior management level, regarding the development of a viable talent management plan for the entire organisation.  

Tips on kick-starting a succession plan

Many organisations dread the planning process. It is true that succession planning can be overwhelming, but organisations don't have to shy away from it. Here are six tips to help you to kick-start any succession planning program. 

1. Encourage leader's inputs 

Leaders create leaders. To nurture your organisation's talent pipeline, you need to engage your leaders. Their support has a positive impact on creating and maintaining the viability of your organisation's succession plan. 

HR personnel needs to clearly communicate their expectations to the responsible leaders regarding their roles and the level of their involvement in the program, clarify on all possible confusions and queries, and ensure accountabilities are well established among participants. 

Read more: Duplicating your top performers 

2. Limit the number of roles 

Not every role in the organisation has to be filled out immediately; there are positions that have a much higher power, and therefore, require immediate attention. Start with just a few critical roles that: 

  • Have a direct influence on the overall stability of the organisation, OR
  • Require highly skilled personnel, and it is extremely difficult and time-consuming to find replacements, OR
  • Have only one "go-to" person or no cross-training has taken place to retain institutional knowledge. 

3. Create a success profile 

Once all the critical roles have been identified, it is time to build "the perfect successor" profile for a specific role in the program. Each role should have their distinct profile based on skill set and competency level.  

Read more: Confidently make hiring decisions with Job Fit solution 

The basic criteria for building a success profile are: 

  • Employment history/ Educational background 
  • Core competencies 
  • Emotional Intelligence 
  • Commitment/ Interest 

4. Assess your internal talent pool 

This is probably the toughest phase in the planning process – identifying the potential successors. Fortunately, with the right tools, the process of assessing and evaluating your employees can be somewhat tolerable. 

How? By integrating performance management in succession planning, which is critical to creating an effective and strategic plan. Leaders and HR personnel can utilise the success profiles created in the previous step and analyse them together with the performance results collected to curate a pool of candidates for each critical role. 

5. Identify skill gaps 

It is certain that a portion of these successors, if not all, need further development in order to succeed in higher roles. The leaders can act as mentors to guide these candidates, to keep everyone moving toward the same goals.  

Proactively identifying the gaps in talents' skill sets will enable your organisation to build targeted development programs. These programs are vital in ensuring all potential successors receive adequate training and are well-prepared for their roles when the time comes. 

6. Review, refresh, repeat 

Just because succession planning is associated with performance management, it is not a "once a year" activity. The external market is constantly changing; the workforce is also evolving. 

You can't stop people from leaving your company. As people shift, your succession plan should also reflect such changes to prevent it from becoming obsolete, and most importantly, to ensure that your organisation is always in the "ready mode". 

For in-depth knowledge about Succession Planning, please download our whitepaper "SUCCESSION PLANNING: A Complete Guide to Success" today!

Download Whitepaper Now!

Topics: Talent Management

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 Rick Yvanovich
 /Founder & CEO/

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