The Definition of Management succession planning is a business strategy that allows the current leaders of an organization to prepare and equip the next generation of leaders. More specifically, it involves:
- Identifying critical management roles across departments
- Recognizing core competencies and skill sets required in the roles
- Establishing an action plan for current team members to assume those roles
- Setting up cross-training and development plans to proactively launch the management succession plan
- Considering current and future organizational goals to identify high potential people for key management positions
A management succession plan is not a one-time plan but a contingency plan that is reevaluated and updated each year. As market demands change, members leave the organization, and new talent is brought on board, a company’s management succession plan should reflect those dynamic shifts to create a long-term competitive advantage through talent.
Why Is Management Succession Planning Important?
Management succession planning is essential because it ensures that:
- The business identifies and prepares for future staffing needs.
- The business can run smoothly without interruptions.
- Workforce members know about opportunities for advancement, fueling purpose, engagement, and job satisfaction.
- Career development programs have an impact and people are promoted from within, which can further aid in retaining top talent.
- The organization can carry out a more cost-effective recruitment strategy.
- The business can handle change, which is inevitable in business.
- Unique knowledge and skillsets remain in the organization and can be passed along to others over time.
Management succession planning equips your workforce with the key competencies to withstand the shifting tides in its industry, be confident people leaders, and have a strategic mindset.
Research further backs up the importance of succession planning:
- Currently, 21% of companies report having a formal management succession plan.
- More than half of workforce members express that having access to professional development opportunities would motivate them to stay longer at their jobs.
- Nearly 60% of managers expressed that for their organization to stay afloat, they needed to reinvent their strategy every three years or fewer.
How Do You Build a Management Succession Plan?
Building a strong management succession plan involves three primary components: assessment, evaluation, and development.
The process of building your management succession plan begins with the identification of future challenges, opportunities, and needs, and what roles will be needed to address those challenges.
Identify Short-Term Key Business Challenges
Think through the present challenges your organization faces. How will these evolve in the future? Are there other potential challenges or opportunities that may surface over the next three to five years?
As you identify challenges and opportunities, conduct competitor and market research to assess possible risks. This research can help lay the groundwork for incorporating the right management succession plan based on your business needs.
Identify Critical Roles
With the challenges and opportunities identified, determine the key roles that will have responsibility for managing the difficulties or seizing the opportunities. It’s essential to consider both long-term and short-term needs:
- Short-Term: Identify critical activities your business needs to operate each day. Which particular roles are involved? How does a specific position impact day-to-day operations? How would it impact short-term outcomes if the person in that role left?
- Long-Term: What is the ultimate vision for the organization? What roles directly impact this vision? Will a new role need to be established to achieve long-term objectives?
The identification of key roles should include more than just senior leadership positions. It’s critical to evaluate all management positions and how they impact current and future needs.
Your assessment should provide the foundation to evaluate talent needs and source potential candidates, including those who are already employed by the organization. This can include colleagues who may already have the competencies needed, as well as those who have the potential to develop the competencies required by the roles.
Assess Requirements and Skills
Evaluate the required skills and training needs for the key positions outlined. What type of competencies do team members need to achieve success in meeting business expectations? Capturing this information before anyone in a key role leaves the company is important.
Identify Potential Candidates
Identify roles that may be a natural fit for an existing employee of your company. Again, a strengths-based approach to employee development and growth is vital in discovering which individuals might fit into key roles.
By actively investing in a team member’s strengths and abilities, you can build their confidence, which can enhance their work performance and engagement.
As you’re planning for the next generation of leaders, consider asking these questions to gather insights into employees’ strengths, interests, and career goals:
- What do you enjoy most in your day-to-day work activities?
- What are some short- and long-term goals you would like to accomplish in your career?
- What are your greatest accomplishments over the last six months?
- What specific strengths do you believe contributed to those accomplishments?
- Is there a career path you would feel would complement your strengths?
- In what areas would you like to grow and develop?
- What skills and knowledge do you have that could be applied in other ways?
Identifying the right individuals is just one piece of the puzzle—building a target career development strategy is the next step in bringing your management succession plan to fruition.
Establish Necessary Cross-Training and Development Program
A cross-training and development program geared toward key managers and employees is a key element in management succession planning. A career development program can begin with:
- Planning in phases: What are the short- and long-term goals for a particular orle in the succession plan? What specific milestones will help the employee achieve those objectives? Noting these areas establishes the accountability needed by prospective leaders to meet the organization’s future demands.
- Exploring mentorship opportunities: Mentorship is a valuable tool in driving performance and leadership skills—70 percent of the Fortune 500 have mentoring programs. Additionally, 25 percent of employees who participate in a mentorship program receive a salary-grade change. By contrast, just five percent of individuals who do not partake in such a program receive a change in salary grade.
As you build a program that encourages talent growth and development, you can pair up a team member with someone whose role they aspire to take on in the future. Allowing a potential leader to learn from another leader and apply practical skills can improve their chances of success in the future.
Stay Connected with Workforce Members
The members of your workforce are the driving force that pushes the organization forward. Their feedback on development programs is highly valuable, so request it and use their ideas and input to create a more successful initiative.
Be intentional and supportive throughout this development phase. Invest in people’s growth and build a focused program that ensures their success. As you provide opportunities for growth and development, look for strengths and weaknesses to establish a succession plan that puts the right people in key roles.
For more guidance on management succession planning, explore our Transition to Leadership workshop. You can gain valuable insights into improving your leadership skills and identifying future leaders. If you have questions, get in touch with our team.