Succession planning is a strategically important exercise for businesses to undertake. It ensures the right leadership is in place at all times – whether you are mapping out future talent requirements, developing your people or planning ahead for any unexpected departures.
Forming part of organisational development and talent management, succession planning can be addressed in a number of ways, and for a variety of reasons.
“Ensuring business continuity and continuity of leadership is an important part of succession planning,” explains Jennifer Grove, a Partner with Gerard Daniels in Perth. “But Succession planning is about much more than just having a plan in place to fill your own role, or to replace senior leaders when it’s time to move on. There are much broader cultural implications and considerations that need to be addressed as part of succession planning, making it more of a strategic exercise – particularly for larger organisations,” Jen continues.
Taking a strategic approach to internal and external appointments
Finding the right balance between recruiting externally and recruiting from within is an important strategic challenge to address.Having a strategy that focuses only on hiring internally can diminish interest from outside talent and reduce your organisation’s appeal to the external market. But too much focus on external recruitment can cultivate resentment internally and lead to poor employee morale.
“People need to see their own executive potential being recognised, and others stepping up and taking on new leadership roles from within the organisation,”says Jen.“It’s also equally important to create market competition for senior roles, and for these roles to be benchmarked against a broader external pool of talent too.”
“Striking a balance that’s right for your organisation can help you to build strong and high performing leadership teams,” says Jen. “To achieve this businesses must be clear on the strategy around internal and external candidates, and what approach will be best for the organisation long term.”
Investing time and resource internally
In balancing internal and external appointments Jen believes that businesses should still focus on developing internal talent, and on creating internal growth opportunities.Careful consideration must also be given to how senior level appointments will be managed,and the support processes that are required to ensure their success.
“To build a culture where people feel they can move up and into leadership roles businesses must be willing to invest in succession planning and supporting internal candidates, and bridgingany skills gaps that exist when they first take on new leadership roles,” says Jen “This requires both time and resource, and as CEO you must find the headspace to manage these transitions and the resources to make them happen.”
“When businesses invest in developing their people they must also accept that in building people up they may still lose them to other roles outside of the organisation” Jen continues. “But by investing in your people and being strategic in your approach to succession planning you will develop a reputation as a place that helps people to grow, which far outweighs the cost of succession planning and lost talent long term.”
Prioritising succession planning at all times
Prioritising succession planning can be a challenge for many organisations, and this has been particularly difficult during the last couple of years with so much time and focus taken up by navigating operating a business during the pandemic.
“As CEO the basic premise behind succession planning is that you need to find the headspace to think about it strategically, and the resource to deliver on it properly,” Jen reflects.
“If budgets are tight it can be hard to prioritise the resource to invest in developing people, and hard to find the time to create the movement that allows people to grow,” says Jen. “But if we can learn anything from COVID and the world that we are moving into it’s just how important succession planning and talent development really is.”