The benefits of succession planning are to make sure a company always has the right leaders in place should a change happen quickly. Learn more.
There’s an old saying that explains the inherent
benefits of succession planning best: If you fail to plan, you plan to fail.
However, when your business is chugging along, and
the economy and your financial future looks secure, it can be hard to stop long
enough to consider what might happen to your company if you suddenly weren’t
purpose of succession planning is to make sure a company always has the right
leaders in place should a change happen quickly. By failing to create an
orderly plan for succession, your company may not get a second chance if it
doesn’t adapt immediately after a key player leaves the company or passes away.
While it may seem like a time-consuming process,
there are six main ways succession planning benefits your business.
The benefits of succession planning are:
Disaster-proofs your business
You buy insurance to protect the company from
hurricanes, floods and fires. You install security systems to defend the
company from theft. And you back up data to an off-site location to safeguard
your business’s proprietary information.
Many business owners get so busy with the day-to-day
operations of their company that they fail to make succession planning a
priority. These leaders may think they’re too young to be hit with a serious
illness. Or they forget that a key player (or several) could be lured away by
another company that needs their skills and is willing to pay top dollar for
them. Any of these scenarios can leave a business uniquely vulnerable.
Remember: Succession planning is another step in your senior leadership’s strategy to protect the company – whether you are physically there for its long-term success or not. Starting the conversation may be daunting, but the sooner the work on your succession plan begins, the quicker your business is shored up for the long haul.
Think of it as business continuity insurance that requires grooming employees.
Identifies your most-qualified future leaders
Formal succession planning requires your company to:
- Identify those positions most critical to the future success of the company. These might not all be C-suite positions.
- Identify internal candidates with the values, skills and desire to take on those critical jobs.
- Talk to potential candidates about their interests and career plans.
These crucial steps in succession planning lead to several
benefits. First, a thorough look at your org
chart helps your leadership better
understand potential vulnerabilities, and can bring a sense of urgency to
cross-train key employees in certain roles.
On the other hand, if there are truly no internal
candidates who seem right for leadership positions, then you know to begin an
external search early on.
Most importantly, some of the benefits of succession planning is that it lets ambitious, less-experienced internal candidates know their hard work and skills have been noticed and appreciated enough to be considered for advancement. This can be an incredible retention tool and motivator for junior managers and subject matter experts who want to advance their careers into management.
Creates structure for training and development
Once your company has identified that Sally, Bob and
Bruce are interested in moving into senior positions, you can identify any
competency gaps and begin grooming them for their eventual succession.
Some of the employee’s professional
development may come in the form of coaching,
mentoring, job shadowing or a gradual increase in more advanced
responsibilities. Other positions may even require the candidate to go back to
school to get additional education or professional certification.
By tapping potential successors early, you give
employees time to acquire the skills and experience they’ll need to perform
well in their senior roles. You also let employees know that you’re willing to
invest in their growth as well as the company’s.
Keeps extra eyes on a job
Once your top prospects are being groomed, your
company has a chance to reap perhaps its best tool to grow and thrive. This
happens when a junior manager is sitting and talking with their senior leader
about why they’re doing things a particular way.
The simple process of explaining the status quo helps
reveal weakness in processes and procedures, uncovered sales opportunities and
opportunities for positive change. This natural process allows your company to
keep an extra set of eyes on its senior roles and encourages questioning of the
corporate norms that may have become dated or inefficient.
In this way, succession planning results in future-proofing
Conversely, when retiring
employees leave, they can act as a sounding
board for questions and concerns, troubleshoot customer problems and more. This
helps to smooth the transition.
Maintains brand identity
You frequently hear news of CEOs who come into a
company from the outside with great promise, only to fail in a short time.
Sadly, such disastrous hires often damage the company’s reputation and
long-term growth along with them.
This usually happens because the outsider CEO doesn’t
understand the fundamental
values and mission of their new company because they
haven’t “grown up” in it, so to speak. Wanting to put their own stamp on the
business, or failing to grasp customer needs, they move the organization away
from its core brand.
The benefits of succession planning is that it helps your company avoid this. By identifying and grooming an internal successor, your company ensures it will be led by someone who shares its values and deeply understand the company’s brand promise, its customers and its employees because they’ve lived it themselves.
Helps the company plan for the long-term
Change happens fast. When your company knows where
it’s going, your team can plan for the future.
If you position succession as part of your company’s
plans, you create a path for retiring employees
to hand off their years of hard-earned knowledge and transition important
working relationships before they leave.
objective of a succession plan is to help your company grow with intent as you identify and build plans for
vulnerabilities in other areas of the business. Other benefits to succession
planning may include providing help in ascertaining which areas require
innovation, setting realistic goals for growth and planning for future talent
needs that may result from that growth.
Learn more about the benefits of succession planning by downloading our free e-book: The Insperity guide to succession planning through HR.