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Nothing succeeds like succession planning

By 9 February 2024 No Comments

Taking a strategic approach for organisational continuity and development

Typically, in our profession, succession planning is thought about solely in relation to business owners but there is a lot more to it. So, we invite you to think of succession planning as an ongoing process of identifying the critical roles within your organisation and developing an action plan for other people to assume those roles when the time comes.

Change is inevitable and people move on, hence succession planning is an essential strategy for organisational sustainability and future growth. A succession plan is more than just a replacement plan; it’s about ensuring the continuous effective performance of an organisation in the absence of people who currently perform critical roles.

So, to ensure leadership continuity into the future why not be proactive and embrace the development of high potential team members within your organisation today. To do this, you will need to identify and nurture potential leaders to take over senior roles. By adopting this approach, you can minimise organisational disruption and maintain momentum and success going forward.

Types of succession plans worth considering:

1) Long-term succession plan

  • This is a strategic plan, deployed over the long-term, that you will stick to as a standard for all key positions.
  • A succession plan of this nature should be re-evaluated and updated on a regular basis.
  • This type of a succession plan is best created as soon as your business is established and not 12 months prior to one of your key people deciding to leave the firm. Examples of what would come under a long-term succession plan for a critical role include a business owner wishing to retire in seven years’ time or an Operations Manager looking to change career in three years’ time. (The topic of succession planning for business owners has been very well covered by Brett Davidson in one of his articles). 
  • It’s good to work on a long-term succession plan based on a 5 to 10-year timeframe.

2) Emergency succession plan

  • A secondary emergency succession plan should also be created to be deployed in the event of an emergency, such as a sudden illness or death.
  • This type of a plan may involve more temporary measures but is intended to keep operations running smoothly.
  • This could see other senior members of staff take on extra responsibilities while a permanent replacement is sought.

The focus of this blog is more on the long-term succession planning, but the advice is applicable to both scenarios.

Succession planning

A succession plan identifies future ‘people’ needs and the people with the skills and potential to perform in these future roles, while considering external changes that are taking place e.g. AI changing the way in which we operate and therefore skills that will be needed in the changing environment. So, what should you be doing?

  1. Be proactive about creating a plan (there is no better time to do this than now)
  2. Identify competencies, skills, and institutional knowledge that are critical success factors.
  3. Identify succession candidates.
  4. Let them know and explain what’s involved/the stages of progression.
  5. Capture the knowledge that individuals possess before they depart the organisation.
  6. Create professional development plans.
  7. Integrate your succession plan into your recruitment strategy.

The simplest succession plan ensures that at least two people know how to do every job in your business.

What are critical roles?

There’s a simple exercise to identify critical people in critical roles, which we invite you to undertake as soon as you get a chance.

First, look at the key functions in your organisation. Second, look at the people essential to performing these functions. Then ask the following questions:

  • Who is/are a single point of failure in your firm? e.g. the only person(s) with access to your bank account, or the only person(s) who knows how aspects of your IT system work, or how to process new business.
  • Who are the most important people in the business?
  • What happens if they were never to show up at work again?
  • What’s the risk of these individuals leaving?

Take a strategic approach

Foresee the future. Prepare for it. Make sure that the organisation never finds itself leaderless or directionless by following this simple three step approach. Please tailor it to your needs.

1) Assess

Now that you have identified the critical roles and the key people take a look into the future to assess what are the likely business needs going forward.

  • Identify significant business challenges within the next 5 to 10 years.
  • Identify the key positions that will be needed to support business continuity. Develop appropriate metrics e.g. position impact, vacancy risk etc.
  • Identify competencies, skills, and institutional knowledge that are critical success factors. 
  • Create an age chart for your organisation.
  • Evaluate current job descriptions versus future needs.

2) Evaluate

It’s worth noting that a departure of any of the individuals from your organisation can present a great opportunity to restructure. Look at the opportunities and challenges.

  • Consider who might be the successors/high potential candidates.
  • Select the skills and competencies needed to succeed in the role and deal with future challenges.
  • Create a gap analysis of skills and competencies.
  • Predict the likelihood of attracting the right person/people.

3) Develop

Plan. Develop. Act now.

  • Capture the knowledge that individuals have before departing the organisation.
  • Develop a pool of candidates to step into the critical positions through targeted training and development plans.
  • Develop an appropriate recruitment strategy.

A special word to business owner and business leaders about succession planning

John C. Maxwell in his book “The 21 irrefutable laws of leadership” covers this nicely in Law #21 Leaders have a succession plan saying leaders have the potential to influence beyond their lifetime and he encourages leaders to pick and mentor successors. He outlines four phases of legacy development:

  1. Achievement: when leaders do big things by themselves
  2. Success: when leaders empower followers do big things for them
  3. Significance: when leaders develop other leaders to do great things with them
  4. Legacy: when leaders put other leaders in the position to do great things without them

If you want to create a legacy, look to pass the baton!

Conclusion

Effective succession planning is an ongoing process that ensures leadership readiness and organisational stability. It is a strategic imperative for your business, and it needs to be continually refreshed in a dynamic business environment.

As they say, “A stitch in time saves nine”. Check out how robust your succession plans are today.


Minute with Maxwell – Succession

“There is no success without a successor”.

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