Succession Planning: What’s best for your organization?

One of the lesser talked about responsibilities of the HR team, but a vitally important one which decides the direction of the organization is - Succession Planning. Each company has its own way of deciding who should be the next leader to ensure that an organization is prepared with the alternative resources for future attrition at key positions or for planning growth of the employees. Let’s understand the importance of this process and what are the things that matter the most for an organization while choosing the ‘successor’.

What’s Succession Planning?

Succession planning is a process to identify and develop people to become future leaders. In other words, succession planning is a path to leadership. This forms a vital component of any organization's success and helps in having in place not just people, but rather the right people to lead tomorrow. Such people who live the values today, so that they can sustain the culture in the future. The process is also about being prepared with the alternative resources for future attrition at key positions and it also helps to replace existing leaders so that they can be promoted further.

In any business, attrition is a harsh reality and a nightmare for HR, and today, what makes an employee to stay in an organization is not only the monetary growth but also the future they see in the organization in terms of their individual development.

What Managers Need to Understand About It

It is important to every manager in an organization to develop at least 2 people with high potential in his team who can take charge of the responsibilities in his absence also they can be trained and developed on required skill set to get to that position. For example, a manager can select someone from his team who has potential and has been a consistent performer and intends to stay in the organization for a longer period.

What HR must aim through succession planning is to develop and groom our leaders for the higher positions instead of hiring someone new for the position as this way we would be sure of the person’s loyalty and we would be able to retain a person for more years.

While developing successors internally would be beneficial for the company anytime, many times HR must contemplate hiring an external person for a senior role, when there are more than one equally placed contenders for the role. This is usually a long-drawn process and poses a multitude of risk. Getting senior leadership externally also includes a heavy cost in terms of direct cost, and loss of time and opportunity.

The pros of external leadership hiring is that a person joining at an influential level can also change an organization’s culture for better by bringing in newer reforms and fresh perspectives. However, it should be the last resort for a company since the cons of hiring outside talent are much more than its pros.

Why Internal Succession Planning is Important and More Desirable

Succession Planning is important because this process is about identifying key roles and to ensure that the organization has the right people with the right skills, capabilities, and experiences, in the right place. It also helps gaining employees’ trust and belief in company and its policies. This process is also cost effective, talent succession planning can reduce costs, since the HR does not need to look outside the organization to search for its next set of leaders. Identifying and preparing internal candidates to fill positions as they become available also helps in being assured of continuity of a set culture of the organization.

What to evaluate while choosing successors

1.     Competency– This is the first criteria which is required for judging the candidates for each position Every position requires a different skill set and the first parameter for evaluating successors is whether the person possesses the required skill set or not.

2.     Identify Key areas and key employees – This is the second most important aspect of succession planning to shortlist the ones who can step into the shoes of their seniors. Whereas for external hiring, it is necessary to judge in which areas does the candidate hold experience and expertise. Having worked and handled multiple areas of businesses is always beneficial for an external candidate.

3.     Developing potential successors in a way that best fits their strengths – While there might be a lot of senior experienced professionals who can be eligible for a senior role. However, simply having experience and desired skill set doesn’t do it. A person needs to be strong in the field where he will be taking a senior role. Each employee should be groomed to succeed the seniors in domains which are their strong points.

4.     Assessing people based on their capabilities- For external hires, the above-mentioned concept applies in a different way. For getting successors externally, HR must first assess the applicant/ candidate based on their capabilities and not based on their experience alone. A candidate may be capable of handling a bigger team and ensuring productivity but might not have had time to exhibit these qualities in his present role.

5.     Develop succession/Individual development plans – Once it is decided as to who would be the be the next one to lead, the HR needs to put in place a proper plan on how the task would be executed. It is extremely important to accommodate the existing leader in this stage so that the leaders too start aligning their minds on the ‘Letting Go’ part.

6.     Provide them with Goal/objectives – The plan needs to be clearly communicated to the successors and be marked with well-defined goals which the person who wishes to succeed will have to achieve in a well-defined time frame.

7.     Track progress against IDP for individual candidates – And the last straw is monitoring the performance of the candidate against the set goals and time-frame.

This entire process helps in smooth transition in leadership roles and this way HR can be sure that they have proper development plans and a career path for each employee in the organization. Any of these points could be deal breaker and all of them carry an equal amount of weightage and importance when it comes to planning succession on leadership roles.