The road to succession planning is fraught with pitfalls. Most short-sighted businesses view it as merely a “nice trend” to follow and cannot grasp the true nature of succession planning. Others give up getting buy-ins from members of the Board and top-level management. Some lack adequate tools to streamline the process.
For more about the road to succession planning please refer to Succession Planning- FAQs you need to know
What are the 4 most common pitfalls in succession planning and how can you avoid them?
1. Thinking of succession planning as a means to mitigate risks rather than to find the best successors
There is no shortage of organisations taken at face value, that benefits from succession planning. Speaking of this process, they often refer to a single-purpose tool purely for mitigating risk. This ill-informed view could result in the plan being treated as a stopgap measure intended to buffer the organisation against contingencies and market disruptions, rather than an indispensable strategic component that fosters business sustainability that builds an adequate pool of talents and grooms them to their best.
A well-planned succession strategy, beyond question, is a sharp instrument for projecting and meeting future demand of leadership. A strategic plan and a course of measures could be formulated to achieve that goal, but the package of benefits that succession planning could bring is not that plain.
In pursuit of identifying a rightful successor, organisations need to look beyond the tip of the iceberg to grasp the very nature of succession planning so they can reap its maximum benefits. By addressing the demand for leadership, succession planning helps:
Maintain business continuity, besides future proofing your organisation from economic uncertainties and labour market changes, succession planning reinforces retention and engagement levels of top performers, as a result driving business efficiency and effectiveness
- Shape public opinion, an effortless power transition of a competent and well-groomed successor into key leadership roles showcases the organisation’s expertise in managing and cultivating every one of their aspects, hence shaping the public’s perception
- Drive employer value proposition, Training and Development plan, a part and parcel of any succession plan, can unlock the untapped potential of any candidates involved in the process, therefore reflects positively on the organisation’s brand image as an employer
- Drive decision-making, by utilising best-in-class assessment tools, generates invaluable insights into internal climate and external environment, hence augmenting strategic decision-making
- Nurture business culture, as opposed to hiring a non-native to whom everyone in the organisation feels foreign, breeds and cultivates a succession-focused culture in which successors are in-house talents. They have been groomed from scratch and embrace the organisation’s vision, ethos and beliefs, as a result bolsters the business culture
- Generate shareholder value benefits, at heart, is to maintain organisational stability to help businesses withstand the ever-increasing volatile, uncertain, complex and ambiguous (VUCA) world, hence encouraging shareholder values.
2. The succession plan generally is not connected with coaching and internal development programs
Our view is that succession planning is a constituent of the Workforce Planning Framework and in that respect, should be continuously conducted throughout the life of the business to align it with any major business decision and strategy execution.
Yet organisations at times completely turn the case on its head. They view this process as merely a one-off event that is delegated to HR functions only and is isolated from the workforce and business plan. This lack of integration could lose or even cut the link connecting succession planning with coaching and internal talent development programs. The consequence is immediate: a blurred picture, or even lack thereof, into the performance and progress of the overall succession plan.
A training and development plan is key to the planning of power transition as it lays the groundwork for grooming talents. In exchange, a succession strategy once deployed helps develop a strong talent bench strength for assuming leadership mantles, thus, mitigating vacancy risk and aiding in every facet of the business.
In order to make up those deficiencies and close the existing talent gap, organisations are compelled to align firmly succession plan with coaching and internal talent development or any coaching plans. On top of that, it is imperative to address the need for accountability first and foremost: Who is held accountable? What roles to assign, and to whom? which is another pitfall that we would later discuss further.
Read More: Succession Planning - 5 Common Mistake and How to Avoid Them
3. Companies are not having an adequate pool of successor candidates
On working out the succession plan, a major challenge facing businesses is in identifying and assessing competent candidates. Failing at this juncture may leave the organisation with an inadequate pool of talents that is "shallow" in both quantity and quality.
Besides efforts that ended in failure due to appealing to gut instinct when choosing candidates, most organisations could not fill to capacity their leadership bench strength simply because they fail to employ the best practices of naming talents.
Sure enough, it is a norm for businesses to have in place some sort of tool for identifying and assessing elite employees. Yet the secret to pinpointing candidate and building leadership bench strength lies in the way those instruments are deployed: there is no such thing as one-size-fits-all tool, each serves one specific purpose or two and for that businesses need to pack all the best practices in one "toolbox" to ensure the best outcomes and the minimum exposure to risk.
Some appraisal methods could help organisation handle the burden in identifying and assessing successor candidates are:
- Key performance indicators to gauge candidates' actual performance
- Objective and Key results to define and track objectives and outcomes
- 360-Degree Review to appraise the subject’s behaviour and performance
- 9-box Grid to evaluate an employee’s current and potential level of contribution
- Psychometrics test to measure how “job fit” the candidates are
4. The roles in the succession plan are not well defined
Many organisations have reported, with dismay, that their overall strategy for identifying successor candidates is devolved to HR functions alone. This lack of accountability and ownership results in a succession plan that has very little to no alignment to the company's Board Of Directors, senior managers and other functional areas, let alone their buy-ins.
Those individuals who presently hold the critical positions play a vital role as they accumulate an enormous wealth of corporate knowledge, and holdings as well. Their insights into the business and their blessings are make-or-break factors that determine the outcomes of every manner of strategies, not just succession planning.
Roles in the succession plan, sadly, is not well defined and assigned to the right people: The Board and senior managers, for the most part, act as "delegators" who typically set goals for the strategy. Once mapped out, the process is then imposed alone onto the HR for executing. If the plan ends up falling flat, HR is held accountable; if somehow it makes it, those authorities take all the undue credit.
Succession planning should not be a one-man show performed by the HR department but an integral component in any business strategy with HR functioning as the facilitator. In other words, succession planning is a process that requires the involvement and buy-ins from all individuals the process influences.
That being said succession planning, though worthwhile, is a massive investment of not only financial resources but efforts and devotion, which is perhaps why the Board members and C-suite executives are reluctant to assume these responsibilities. On top of that, they see no silver lining in mentoring a group of people who are going to take over their positions. In their views, succession planning is identified with their imminent layoffs.
In business with an effective succession plan, top authorities and senior managers act as mentors who actively coach successor candidates and enhance the training and development plan by providing their insights as to the reports’ progress.
In order to talk any level of leadership into buying-in and actively championing succession planning, consider:
- Assigning roles and accountability right up front, which serves as a road-map guiding them what to do and on whom to do it to: What is my role in this process? Am I really held accountable for this?
- Articulating and communicating with transparency the values of this function to the business continuity and growth to the top authorities: Is succession planning a threat to my career?
- Rewarding generously with both monetary and non-financial incentives to these “leadership coaches”: What benefits I could reap from this?
For more best practices about Succession Planning, please download our whitepaper "THE EXECUTIVE'S GUIDE TO SUCCESSION PLANNING" today!