Why your organisation needs succession planning
What if one of the leaders of your company needs to leave? What would be your next step to avoid any hassle? One thing that can cause the most disruption to a company is the need to suddenly replace a leader. A recent survey shows that almost 60% of organizations lack an effective succession plan for themselves and fail to immediately name a successor when the need arises. This is not it. Recent global research that involved over 2300 directors concluded that merely 15% of them have a detailed succession plan.
There is a famous saying, “If you fail to plan, you plan to fail.” This suits succession planning perfectly. When your business moves ahead gradually and the financial future and economy look secure, you hardly think of the time when you might not be there. Once you have to leave your position as a CEO or director, you need to consider what might happen after that. In the absence of a defined plan, the departure of a leader can create extreme confusion and lead to a massive risk to the organization’s stability. If this is true for your company as well, then it’s high time to think about an effective succession plan and implement one asap.
Succession planning aims at ensuring that a company always has the right leaders or successors in place if a change happens quickly. Failing to create a plan for such situations may result in loss and an organization may not even get another chance. Therefore, it is important that companies adapt smoothly and immediately as a key player leaves. And to make this whole process convenient and organized, succession planning software is used that saves time and energy during a leadership transition.
You might think that you don’t need succession planning right now but trust us, that you do. It not only prepares you for unforeseen circumstances but offers benefits to other aspects of your business as well. However, before we analyze why your company needs succession planning soon, let’s understand what this concept is all about.
Succession Planning: What Is It?
Succession Planning is essentially preparing for and executing a smooth transition for a leadership position. It is a process that involves identifying and developing employees to fill a role and responsibilities within the organization. This includes recruiting top talent, executive search, training internal candidates, selection assessment, onboarding a new leader, and successful transition. The goal is to not make the current leadership dispensable but to ensure business continuity and enhanced growth without disruptions. Companies implement succession planning to make sure that all the key roles within the organization are filled.
In most organizations, succession planning is handled by the HR department and is considered a critical part of HCM solutions. HR managers look for the right people internally and externally who are suitable to fill the position and fit into the culture. They also check that the right processes are in place to train and develop people for leadership roles, assess all employees, and drive a long-range view. The succession planning approach enables HR professionals to focus on what their top talent can become in the future and explore ways to give more opportunities to them.
Why Is Succession Planning Important?
As you are now familiar with the concept of succession planning, here are a few reasons why your organization needs to implement it at the earliest:
Increases Employee Retention
No employee wants to get stagnant or stuck in the same position for years where they have the same pay and doing the same job for the rest of their professional life. They strive for achievements, be it big or small. Sadly, a few companies fail to provide employees with such opportunities which is a primary reason for low retention. Considering this, organizations are coming up with better work opportunities for the workforce to help them climb up the ladder through promotion and advancement. They are also using employee self-service software so staff can update their information, skills, and find growth opportunities in the organization. This level of transparency and empowerment motivates them to stay for longer in a company.
Believing that the company lacks scope for them to grow is a strong drive to turnover. However, with effective succession planning, employees feel that the future of the organization, their department, and the region is secure. Furthermore, a well-communicated plan to analyze the performance for promotion fosters the culture of equality.
Disaster-Proofs Your Business
Companies take a plethora of protective measures to safeguard businesses from various threats and risks. They buy insurance to protect a company from disasters, such as fires, floods, earthquakes, etc. Many enterprises install a security camera and systems to keep a watch on any suspicious activity. Moreover, they back up data regularly to a secure and off-site location to keep all the sensitive information safe. Organizations go to great lengths to protect their day-to-day operations but often fail to prioritize succession planning.
Leaders are so caught up with their work that they never think they might get sick or leave at one point. They ignore the fact that their key players could be lured away by a competitor company that requires their talent and skills. These situations can leave any business vulnerable to disaster or disruption. Succession planning is a crucial step to secure a company from any such threats. It is a powerful leadership strategy that might take a bit longer to start but the sooner you start, the more benefits you can reap. With the right plan in place, you can avoid the long haul and be assured of business continuity.
Maintains Stakeholder Trust
No matter if your company is privately held or publicly traded, stakeholders and board members are important, and maintaining their trust is critical to the company’s success. However, when you lack a well-defined succession strategy, it shows your ignorance to them which can have an adverse impact. Thus, having a succession plan available all the time demonstrates to these invested parties that you are actively managing your staff and prepared for the future. Although some companies mandate that CEO must be the successor, some other key roles and positions need to be taken care of. Any sudden departure of directors, vice presidents, division leaders, department heads, team managers can create a vacuum that confusion.
Moreover, this unexpected vacancy can divert attention from growth and create costly discord. With clear goals, boundaries, and roles, you can avoid these situations and win the trust of your shareholders and other invested parties. It also eliminates duplicate efforts that show inefficiency.
Identifies Most Qualified Talent
Well, succession planning is not only restricted to finding the next leaders and preparing them for the future. It involves various steps and tasks that are performed by HR professionals, including:
- Identifying internal candidates with the right skills and values to take on the critical job.
- Find the most important positions that are crucial for the success of the company.
- Discuss and talk to potential candidates about their career plans and interests.
These steps of succession planning lead to various benefits. As you get a thorough look at the organization chart, you can understand potential vulnerabilities and bring on a sense of urgency to cross-train employees for different roles. Also, if you can’t find internal candidates to replace the leadership position, then you can start your search from external sources early.
In addition, ambitious and hard-working employees of your company would know that their skills and proficiency are being noticed. They feel encouraged when they are appreciated and considered for advancement. This is a great motivational tool especially for junior managers and members who are looking for career growth.
Creates Brand Identity
Imagine that your company hires a new manager or leader for a key role from the outside with a great promise but only to fail soon. Such a disastrous hire hampers the company’s image and also disrupts its long-term growth. In fact, employees become disgruntled when they realize that after working for the organization for years, they are not considered for promotion and someone else from outside has been hired. This affects their loyalty toward the company and they switch to other organizations.
Succession planning helps you avoid this scenario. It identifies and grooms internal employees for leadership roles and you can relax that someone familiar who shares the company’s values and understands its brand promise will take over the position. They know customers better and work dedicatedly to maintain the brand reputation.
Wrapping Up
Of course, you can never predict the future. However, proper planning can help you prepare for unforeseen situations and address them efficiently. Identifying successors for senior positions and groping them can contribute significantly to your business success. Also, you are assured that they know your company’s values and can respond well in case a disaster strikes. Proper succession planning keeps your company in good standing.
So, without any further ado, take your first step toward succession planning and future-proof your company against any unexpected situation.
Author’s Bio: Alicia works with the editorial team of Accomplish EP, a leading company offering online payroll services. Exploring the latest technologies, reading about them, and writing her views have always been her passion. She seeks new opportunities to express her opinions, explore technological advancements, and document the details. You can always find her enjoying books or articles about varied topics or jotting down her ideas in a notebook.
