Succession planning is a process for identifying and developing internal people with the potential to fill key leadership and technical positions in the company with the objective of providing a pool of experienced and capable employees that are prepared to assume these roles as they become available.
Some companies focus all their succession planning efforts on “high potential individuals,” whereas others create a succession plan for everyone from the moment they join the company. The benefit of focusing on high-potential workers is that you can channel more resources and coaching towards those employees with the greatest potential. However this approach carries a number of risks. One is that you overlook great people and alienate and frustrate the rest of the employees, which can impact morale and turnover. Another is a tendency to focus on mirror images of current post holders which limits diversity and does not always take account of future needs.
We have come across companies who have focused on high potential individuals but kept the process covert in order to retain those not included. This has not always been successful as several of the high potential individuals have left their jobs because they could not see the potential for further progression!
Developing leaders internally takes time and effort, but research shows that home grown candidates are more likely to be successful than external candidates, especially in their first two years in post.
However, internal candidates are not always the best option. If a company wants to move in a dramatically different direction, bringing in an external candidate with no ties to the past may be the best choice. Similarly, if a current leader leaves before the planned successor is ready to move up, it may be better to bring someone in from outside.
Whatever approach is used, it is important to recognise that there is rarely a “ready now” successor, and regardless of whether the successor is an external or internal appointee, they will need an appropriate support package to ensure that their move into their new role is as effective as possible.
For any succession plan to be really effective, it is vital to recognise that the plan has many stakeholders and it is important that each be brought into the process in a timely manner so that the whole process is transparent and seen to be both objective and fair.