Succession plans are proven to support business growth and success. Research shows that an effective succession planning process can raise a company’s valuation and investor returns by as much as 20% to 25% annually. Whether you are looking to develop basic transition plans for managers or implementing a complete CEO succession planning process, a well thought out succession plan for a business can make the difference between an assured future and uncertainty.
Having a succession plan in place also encourages your employees to stick around and feel happy with their jobs. The succession plan provides a clear roadmap to the future that allows them to picture their place in the company’s winning journey.
The Society for Human Resource Management (SHRM) particularly recommends additional succession planning efforts during uncertain times, like a major company transition or national economic crisis. At challenging turning points like these, your people need extra support and reassurance about what’s coming down the road.
What Is a Succession Plan?
A succession plan is a document that arises from thinking strategically about a company’s business activities and identifying key personnel. While a strategic planning model doesn’t always name people specifically, it outlines who’s in charge of certain roles and goals in the organization as it moves forward.
The succession planning process depends on a company’s desired outcomes. If there’s already a succession plan in place, but it’s inadequate, the focus will be on expanding and refining the plan. Often, succession planning involves building a new plan from the ground up.
Common succession planning activities include:
- Developing a clear vision and structure for a succession plan
- Incorporating the company’s mission statement into the plan
- Identifying future leaders and involving key stakeholders
- Creating a calendar of succession planning milestones
- Planning for unexpected events
- Deciding how conflicts and challenges should be handled
- Undergoing business coaching and strategic planning related to the succession plan
What Are the Succession Planning Best Practices?
Succession planning is a complex, ongoing, and individualized process. How your company handles its succession plan will naturally be different from any other company in the world.
Certain succession planning best practices are most likely to support success. Here’s an overview:
Think Strategically and Long-Term
A common saying in succession planning is “start with the end in mind.” Decide what your company’s desired outcomes are, and build backward from there. Who should hold key positions as the organization pursues its accomplishments?
Use Succession Planning Tools
Using the right succession planning tools is an essential part of the process. A company rarely develops an effective succession plan without using a structured and systematic framework.
Consider Talent Development
Don’t underestimate the impact of your company’s hiring and retention policies on the success of your succession plan. Incorporate talent development and clarify how your company will invest in recruitment and talent development resources.
Allow for Variations in Leadership Styles
A succession planning model usually identifies people by roles, but it’s vital to keep in mind that companies employ actual human beings, not just roles. Your team is full of variation and diversity to embrace as a natural part of the succession planning process. The succession plan must adapt to various leadership styles.
Work With a Business Coach
Ensure your company is getting the most out of its succession planning process by working with an experienced and reputable business coach. Their expertise will guide your process toward the best possible outcomes for your succession plan.
Launching Your Succession Planning Process
Leadership Resources teaches techniques that supercharge a company’s growth while leveraging its strengths. We offer a wide range of leadership development services including building succession plans, developing strategic thinking, forging new bonds with business coaches, nourishing interpersonal skills, fostering emotional intelligence, and much more.
Now’s the time to strengthen your company’s plan for a successful future. Enhance your knowledge of effective succession planning by downloading our free guide.