Supercharge Your Staff with Succession Planning
Most executives set production goals to encourage their company’s employees to move forward, resulting in improved productivity and job satisfaction. Fewer executives look to succession planning as one of the tools that will help them carry the business forward. However, succession planning can be an effective way to supercharge your staff, reassure your clients, and make sure your strategic goals are on track.
At the barely-able-vote age of 21, I met with a mature and successful financial planner. I liked everything he said about planning for my retirement until I asked him, “What happens when you die? Who is in charge of my money then?” He did not have an answer. I did not work with him.
My current financial advisor compiled a team around her and eased her clients into getting to know and trusting those teammates over a series of 102 years before she finally retired. A credit to her succession planning, NONE of her clients left the firm.
The Succession Planning Process
- Identifies employees who could possibly fill key positions in the company when they become vacant.
- Establishes a process for training and developing potential successors on an ongoing basis.
Succession planning isn’t just identifying individuals who already have all the attributes needed to move up. It’s a process of projecting future needs, considering products or services needed in 10 and 20 years, and planning for innovation.
Great leaders then identify individuals with potential who can be groomed both internally (mentorship) and externally (executive coach) so they are ready to assume more responsible positions.
The Importance of Succession Planning
Succession planning is critical for a variety of reasons. Senior executives need to consider who will run the company in 5, 10 or 20 years. A company that has only seniors and baby boomers in key executive positions will experience a wave of turnover. Millennials need to be hired and trained now to capture the wisdom of the existing managers before they leave.
Other reasons to start succession planning include:
- Preparing for the unknown. Every business needs a contingency plan. The recent hurricanes and wildfires reiterate the need to plan for disasters. Waiting until an emergency strikes is not a good strategy.
- Accidents and illnesses happen. No one can predict accidents, illness, or a senior executive’s sudden need to retire. Most Americans claim they intend to work until they are 67, but they are forced to stop working at 62 to care for a spouse, a parent, a child or themselves. Succession plans need to be in place long before a personal crisis creates a business emergency.
- Building and encouraging current workplace employees. With the succession planning process in place, employees know they are going to move into positions of greater responsibility, leadership, and compensation. This helps employees have a goal. They can pursue training, seek more education, and they are more fully engaged at work. They have more skin in the game. Gallup claims 63% of workers today are actively seeking other employment. If workers have a career plan in their current workforce, they are more likely to stay and make valuable contributions.
- Creating smoother transitions. Having a succession plan makes the transition easier and more effective when it happens. Without a plan, a sudden vacancy may require rapid hiring, which may not be the best plan. Corporations know they need to hire slowly and carefully — being forced into a fast hire can be disastrous.
Succession Planning Impacts Current Employees
Ambitious new employees in entry-level positions want to know that they have a chance of advancement in a company. Middle managers look forward to the opportunity to become senior managers.
A succession plan demonstrates a company’s commitment to hire from within. Beyond that, a visible program to provide training and development opportunities for potential successors demonstrates that the company is serious. Findings from a study by the Gartner company, Software Advice, indicates that succession planning has a big impact:
- 62 percent of employees said that a succession plan would make them “significantly” more engaged at work.
- 94 percent of employers indicated that having a succession plan improves employee engagement.
In addition to the statistics, succession planning has other non-quantifiable benefits to employees, including:
- Employees experience an increase in self-esteem when they know that they are being coached, mentored, and prepared for promotion.
- Employees are more likely to make a commitment to career development within the company.
- Employees indicate increased trust of management when they are selected for future responsibilities.
- Employees find value in the opportunity to work with managers and mentors to develop their skills and obtain the education they’ll need to advance.
- Employees can broaden their career aspirations within the company because they are identified as high potential. They may be called to fill openings in various parts of the company because a formalized succession planning process has made them visible company-wide.
Succession planning isn’t a perfect science. Not every candidate identified for future promotion will succeed. However, a company can provide significant employee motivation, and retain those who fit the company’s culture and share its vision. With effective succession planning, the company establishes a plan to ensure leadership success now and in the future.