What is succession planning?

Succession planning can be considered a company’s passport to ensuring its sustainability and business continuity. Organisations, big or small, have their competent and hardworking people as their backbone. Without them, their success will not be possible even if they put in a lot of investment in high technology and advanced machineries. It’s one thing, though, to have a pool of qualified and high-potential talent; it’s another thing to ensure that they are in the right positions to maximise their talents and sustain their motivation. The problem comes in when an employee who is currently occupying a critical function becomes unable to perform his or her duties for whatever reason. The company must then be able to identify a key talent from within the organisation who can fill up the void, and this is where succession planning comes into play. Succession planning is an exercise that companies do to ascertain that they have strong, experienced and knowledgeable senior managers who can serve as mentors to promising junior officers who can (and will one day) take on more critical roles and hopefully lead the company to greater success. Succession planning is about making sure that there is a qualified and competent manager who can assume greater responsibilities as the need arises and at any given time. Like in any sports team, the coach relies on a deep bench of â€Å"second team† members to replace a â€Å"starter† player when necessary. In addition, succession planning is anchored on the company’s strategic goals. For instance, if the company decides to expand its business beyond its current service area, top management needs to identify qualified talents who can occupy new posts as a result of a new deal closed or replace senior managers in the parent company who will be seconded to the subsidiary. This means that top management must constantly be on the lookout for possible changes within the organisation and quickly identify the manpower implications of these developments. Organisations that have successfully institutionalised succession planning in their organisation have integrated it into their day-to-day business operations. Succession planning is a continuous activity and not just a periodic thing. Key Elements of Succession Planning The first step to a successful succession planning is having a comprehensive and effective talent mapping and assessment system. Here, the company needs to define the skills set and competencies required for a particular rank and / or function in order to evaluate if all its employees are placed in the position that is most suited for them. Moreover, the company should be able to identify and provide development opportunities and growth areas for each key employee. Furthermore, the company should classify an employee as a high-potential talent, average performer or one that is unreliable and unmotivated. This is to make sure that the company allots more time and resources to develop the right people for the job. This means that a high-potential talent will be given more training and development programs and will be exposed to more growth opportunities compared with an average performer. Another key element in succession planning is to ensure that there is a regular performance evaluation system in place especially for key and emerging talents in the organisation. For most companies, this is done annually; for some semi-annually or even quarterly. Whatever the case is, the company should set clear, quantifiable, measurable and realistic targets against which an employee will be evaluated. Through this, top management will be able to see who among their employees are performing well against their deliverables. If there is a nonperforming employee, the company should find out the underlying cause for this because it might be a case of mismatch between the employee’s skills set and the role that he or she is being asked to perform. The company then should be quick to rectify this problem by moving that employee to a more appropriate position for him and find a more suitable talent who can take his or her place. Companies should also establish a mentoring mechanism and encourage their senior managers to always have an understudy who they think can assume their roles in the future. This understudy or apprentice will shadow the senior manager and help him or her perform critical tasks to develop the needed leadership and management skills. Moreover, companies should foster a working environment where there is flow of information from senior to junior managers and vice-versa. Talent retention is also an important element in succession planning. Companies should invest in making their employees happy and satisfied by providing financial (e. g. rewards and incentives) and non-financial â€Å"gifts† (e. g. employee recognition programs, good healthcare plan, training and development programs, safe and healthy working environment, etc. ). This, then, allows more time for seasoned managers to transfer their knowledge and share their experience to their younger colleagues so that when the time comes, junior officers can step up to the challenge. Benefits of Effective Succession Planning An effective succession planning can bring about benefits both to the company and the employees. First, the company can be assured of a stable business anchored on a strong senior management team and an equally-reliable pool of second stringers composed of trained and groomed junior employees. This, in turn, will make investors and shareholders more confident about the future of the company, which hopefully leads to increased shareholder value. On the part of the customers, they will also be assured that their service provider is in good hands and will be able to cater to their long-term needs. Moreover, good succession planning will save the company time and money in externally sourcing the talent who can best fill in the vacant position. External talents, no matter how brilliant they are, need ample time to understand the business and blend with the organisation. In the same manner, employees will benefit from an effective succession planning system as this will meet their career development requirements and make their existing and future roles clearer. High-potential employees will also appreciate the company’s taking notice of them and providing them with more top-level training and development programs. They will surely feel that they are given importance to by the company. Finally, succession planning gives employees a sense of stability, knowing that they have a long-term career path with the company. This, in turn, will make the employees more motivated, optimistic and forward-looking.