We often find that people immediately associate the process of Succession Planning with larger organisations where it clearly makes sense to have a Human Resources “replacement plan” for key roles within the business – should the worse happen, or indeed the business needs to implement a restructuring programme.
Indeed, the above is one example, however the process can also be applied to Disaster Recovery planning for unforeseen incidences such as fire, floods, earthquakes, tsunamis, IT outage, data loss/ theft, malicious IT system attacks or legal case exposures. We will cover in a later blog, the subject of Disaster Recovery separately.
We at gutowski & milner strongly argue that it makes sense that all business (no matter the scale) should have such a plan in place, because the potential consequences of a key member of the leadership team / vital employee leaving or a disaster occurring with no obvious contingency plan – could have similar, devastating consequences to the company.
At its core, Succession Planning is the creation of a strategy to prepare for replacing key individuals when they are either promoted or leave the business by their own decision or the position / role is terminated. Examples can be a family run business where control is passed from one generation to the next. Or, in a larger, multinational organisation, there may be a need to prepare a successor to take over from the existing leader.
The strategy should be formally documented & frequently reviewed, (remember that organisations are continuously evolving). The following points should be considered when preparing for Succession Planning:
- Conduct an audit of the skills & qualifications of the organisation. This is partly a formal process, but we also recommend that understanding the future desire of employees should be part of the appraisal process.
- Identify employees who have the skill set, potential, ambition & aptitude – to be considered senior managers for the future. These are your stars.
- Promote your stars, ensuring that they have the appropriate training & experience needed to develop in the future.
- Through formal & informal meetings, let your stars know that you have a long-term plan for them.
In our view, there are many positive aspects of developing such a “people plan”, including, but not limited to:
- Minimising possible disruption to the business during the transition, as the shock of the change is reduced (many employees can anticipate the change before it happens).
- Cost effective – promoting from within the business can often be less expensive than hiring outside talent, however it should be noted at bringing in an Interim Manager, for a limited period to buy time, & prepare the ground could be a good solution. Please see more details in a separate blog at Interim Manager.
- Motivational for employees. If the process is followed, then this can be a very powerful way of motivating high performers within the business.
On the flip side, there are very real potential negative consequences of either not having a plan in place, or indeed the process has been poorly implemented, which can include:
- The organisation becomes rudderless, or worse still is thrown into paralysis, because no recognised leadership is present.
- Employees with high levels of potential – leave the company because they do not see a clear route to full-fill their ambitions.
- There becomes the general perception that the current management are only interested in themselves & have little care for the future of the company, post their own leadership.
Normally, we would recommend that the CEO together with the appropriate HR resource develop, what is a highly confidential (due to obvious reasons) plan.
At gutowski & milner we have extensive real-life experience in developing these strategies with our clients and are available to talk this through and help you develop a strategy that works for you. Please feel free to contact us at gutowski & milner for more details.