By Mary Ellen Normen, Empowerment Growth Strategist | Learning Experience Designer, NWCFO.com
Succession planning is an important strategic process that makes sure your organization is stable by finding and training internal talent to fill important leadership roles at all levels. This is the best time to look at your leadership pipeline and your financial forecasts as you get ready for the end-of-year business planning and budgeting processes. It’s not enough to just get ready for retirement or unexpected departures; you need to build a solid bench of skilled leaders. This will create a steady stream of talent that will help your company stay strong and succeed in the long run.
Why Business Planning and Strategy Efforts include Succession Planning
Choosing people to occupy top posts is only one part of good succession planning. It implies looking at talent management in a way that works with the company’s goals and culture. Companies that have good succession planning procedures have easier leadership changes, maintain institutional knowledge, and are better prepared to adapt to change.
A strong succession plan helps businesses figure out which jobs are vital, look at probable successors, and make development programs that prepare high-potential employees for additional responsibility. This is crucial because it affects everyone in your company, not just the top executives. The managers, divisional leaders, technicians, and staff members who have institutional knowledge and keep important relationships going are what keep your organization operating.
This proactive approach lowers the risks that come with having leadership gaps and makes sure that the company can continue carrying out its strategy without any problems.
Getting to Know Your Current Team
Before you can plan for succession, you need to know what you have right now. Create a skills assessment and inventory for your team; one that helps identify what will be lacking or missing when someone retires. Tools like Personalysis which identify personality traits give you data-driven information about your team’s strengths, weaknesses, and how they work together.
Personalysis reveals how people talk to each other, make decisions, and do their best job. When you utilize it, it helps you answer key questions regarding planning for the future.
- What are the leaders you have right now’s best qualities? The first step is to know what your team needs.
- What does this person’s team look like? The team profile reveals how the members of the team get along, what abilities they have, and how leadership affects the work of the team.
- What would your team look like without them? This key inquiry tells you what would be missing if the person departed, which helps you find specific gaps that need to be filled.
- What strengths do you wish to work on? Use this knowledge to make a careful plan for your succession strategy.
Key Elements of Effective Succession Planning
Talent Assessment: Performance metrics and personality profile data should be used to regularly evaluate internal talent. This evaluation looks at many different things to locate people who have actual leadership potential and see if their natural skills fit the needs of the role and the team.
Development Planning: For individuals with a lot of potential, you may want to make individual development plans that list the experiences, skills, and knowledge they need to gain. These plans should include stretch assignments that give new leaders a chance to learn about new parts of the organization, mentorship relationships with senior leaders, formal leadership development programs, and cross-functional experiences that help them become more flexible and build partnerships.
Knowledge Transfer: It’s important for succession planning to make sure that important leaders have the information and relationships they need. This includes chances to shadow, detailed process documentation, planned transition times, and developing relationships with people in relevant and important roles.
Ongoing Communication: Leaders and people who might take over should always communicate about succession planning. Not only does open communication about career paths and expectations keep the finest employees, but it also makes sure everyone is on the same page.
Building Your Leadership Team at Every Level
One mistake that many organizations make is only planning for succession in top-level jobs. There are important positions at every level of your organization. If someone leaves unexpectedly, such as a financial expert in charge of core systems, a grants manager in charge of foundation partnerships, or an operations coordinator with a lot of process experience, it can hurt operations and the understanding of how the institution works and performs out in the market.
Strong succession planning looks at how people’s jobs affect operations and relationships, not just their titles. Use your year-end planning to find these jobs, the risks that come with them, and the most critical criteria for developing succession.
How to Handle Common Issues
Organizations typically have a challenging time finding applicants who are actually ready, or combining internal growth with external hires, or managing the expectations of several high-potential employees who are competing for a few open roles. To deal with these problems, do the following:
- Clear, fair ways to evaluate people that lower bias Talk openly about career paths and what is expected of them.
- A promise to train more leaders than there are jobs available right now
- Reviewing and modifying succession plans on a regular basis as the needs of the company change
Don’t think of succession planning as a one-time thing. By making it a part of your yearly year-end planning cycle, you can make sure it gets frequent attention and that financial investments are made in the right places.
Linking Year-End Planning to Succession Planning
Your year-end business planning gives you the chance to combine operational strategy with succession planning:
- Budgeting for professional development: Set aside money for leadership development, training, coaching, and mentorship.
- Succession risk assessment: As part of your strategy planning, consider as part of the planning structure what would happen if important personnel suddenly left without notice.
- Leadership capacity planning: Make sure your strategic plan for the next three to five years includes a realistic look at whether your emerging leadership bench can carry out that plan.
Action for Consideration
Two critical things you can do to ensure your business or nonprofit has longevity are to build your leadership bench and plan for succession. Finding high-potential employees early on, giving them targeted development opportunities, using personality insights to match people with roles and teams, and keeping a strong pipeline of capable leaders can help organizations make leadership changes go smoothly and set themselves up for long-term success.
The best companies don’t think of succession planning as something they have to do right away. Instead, they regard it as a strategic need that improves the whole company. As you wrap up your planning for the end of the year this December, be sure to talk about building a leadership bench. It is relevant and critical for the longevity of your business.