Succession planning and risk management are essential aspects of performance management, especially for key positions that are critical for the organization's success. In this article, you will learn how to assess and mitigate succession risks in key positions, and how to develop a succession plan that aligns with your strategic goals and talent needs.
Succession risks are the potential negative impacts that can occur if a key position becomes vacant due to retirement, resignation, termination, or death. These impacts can include loss of knowledge, skills, relationships, revenue, reputation, or competitive advantage. Succession risks can also affect the morale, productivity, and performance of other employees, as well as the continuity and stability of the organization.
Do you want to get started? -Begin by building succession planning into your overall business continuity planning. Backing up data and backing up talent are important aspects of continuity plans. -Identify the key positions for which you want to mitigate succession risks. -Identify the people ready to step in to these key positions the moment succession is required. -When identifying successors, distinguish between a person already identified as a successor, experienced and competent persons who agree to step into interim roles in a pinch, and people who are potential successors needing further development (along with the specific plans to develop them).
To assess succession risks, you need to identify the key positions in your organization that are vital for your current and future performance. You can use criteria such as strategic importance, operational impact, financial value, or difficulty of replacement to rank the positions according to their level of risk. You also need to evaluate the readiness and availability of potential successors, both internal and external, for each key position. You can use tools such as talent reviews, performance appraisals, career development plans, or talent pools to assess the strengths, gaps, and aspirations of your talent pipeline.
To mitigate succession risks, you need to develop a succession plan that outlines the actions and resources needed to prepare and support the transition of key positions. This plan should include a clear definition of the key positions and their roles, responsibilities, and competencies, as well as a list of potential successors and their readiness and development needs. Additionally, it should have a timeline and process for selecting and appointing successors, a communication and engagement strategy for informing and involving stakeholders, a training and mentoring program for developing and retaining successors, and a contingency plan for dealing with unexpected vacancies or emergencies.
From my experience, don't make the succession planning process unduly complex or cumbersome. Succession planning is about having a series of potential options at your fingertips ahead of when the need arises. Invest now to develop the key leadership talent for tomorrow and build the skills and capabilities that will be required. Don't limit succession planning to internal candidates only. Consider which talent from competitors or adjacent industries could be great options to consider. Succession planning is a solid platform from which to build DE&I strategies and there are great assessment tools available that can be aids to supporting leaders as they transition into new and often stretch assignments.
Succession planning and performance management are interrelated and mutually reinforcing processes that aim to optimize the organization's human capital. To ensure alignment between the two, you should align your succession plan with your strategic goals and talent needs, and review and update it regularly. Additionally, you should integrate your succession plan with your performance management system, and use performance data and feedback to identify and develop high-potential employees. Furthermore, you should align your succession plan with your talent management strategy, and use talent management practices such as recruitment, retention, recognition, and reward to attract and retain qualified successors. Finally, you should align your succession plan with your organizational culture and values, and foster a culture of learning, collaboration, and diversity to support succession planning.
To measure and evaluate the success of your succession plan, you should establish and track key performance indicators (KPIs). These KPIs can include the percentage of key positions with a ready successor, the average time and cost to fill a key position vacancy, the retention rate and satisfaction level of successors, the performance and impact of successors in their new roles, and the overall improvement in organizational performance and competitiveness.