King's crown for the one who relieves the position

January 29, 2023

What is a Succession Plan? Everything you need to know

Table of Contents

1. What is a Succession Plan?

A succession plan is a strategy for identifying and developing future leaders in an organization, not just for leadership positions, but for senior roles at all levels. With this Human Resources strategy, you can help high-potential employees develop key skills for the position.

Succession planning ensures that an organization continues to be efficient even if people who held key positions retire or resign.

2. Differences between a succession plan and a career plan

Succession planning is the continuous process of recognizing and developing potential leaders to fill critical positions and replace former colleagues in an organization. The goal is to find possible replacements, both inside and outside the organization. On the other hand, a career plan is a process in which an employee sets career goals and defines strategies to achieve them. Career plans help assess the interest and skills of each employee, identify alternative job opportunities, set goals, and plan development actions.

3. Benefits of the Succession Plan

3.1. Protects the organization from uncertainty

One of the most important benefits of creating a succession plan is that it protects the organization from any change: a retirement, a redundancy, sick leave... We should not plan the succession after the fact, when the change has been announced and we are invaded by stress and urgency. Leadership transitions take time! Having a talent map will help us to always be prepared for any possible change.

Without a succession plan, what would you do if one of your best employees quits or is on sick leave? Opening a selection to replace each employee who leaves as positions become vacant is unsustainable, it generates many more expenses and you will always depend on external resources.

3.2. Identify future leaders

A succession plan identifies internal candidates who have the skills and qualities to take on critical positions. This planning process can also help identify an employee's improvement needs and points where talent management could help improve their performance.

3.3 Promotes continuous training

Succession plans are not only about leadership, they are also applicable to any type of internal promotion or change of position. A good training plan, in addition to providing learning resources, also offers training and mentoring opportunities for professional certifications.

If there is no plan in place for people to progress, they could end up leaving the organization, how about giving them alternatives?

3.4. Long-term talent planning and retention

Key employees stay in companies where they have clear opportunities for growth. While hiring outside candidates may make strategic sense for certain roles, organizations also benefit from providing advancement opportunities through succession planning, increasing employee engagement.

3.5. Save time and money

The time it takes to find a replacement employee costs productivity, time and money. Succession planning helps ensure that more employees with the necessary skills are available to replace senior managers or any employees that need to be replaced.

This planning provides greater fluidity in the processes, since qualified employees can immediately fill the roles. Competing for talent with other companies makes it difficult to hire the right candidates, and being able to choose from internal employees helps avoid this challenge. In addition, it strengthens the commitment of the team through professional development and makes workers feel valued.

3.6. Preserves brand integrity

When a person joins an organization from the outside and fills a leadership position, it is vital that steps are taken from Human Resources to ensure that the new addition understands and respects the values of the corporate culture. Otherwise, the same thing that happened to Disney will happen and we will have to bring back a retired director.

If, however, we place full emphasis on internal succession, new leaders are more likely to understand what is right for the organization and their team. An example of a good succession plan is the CEO of Microsoft, Satya Nadella.

4. How to create a Succession Plan?

Here are seven tips for succession planning:

4.1. Identify key positions

Analyze strategic and business plans to identify the most critical positions for the organization's growth.

4.2. Define the profile of the position and the requirements

Once you have identified the positions that need a succession plan, you need to determine the needs and performance requirements of that position. What selection criteria do you need to fill this position if it were vacant? What competencies and skills are needed in this role?

4.3. Identifies succession candidates

Figure out what would cause certain key employees to leave and choose the people who could take their positions. To do this, it establishes the key competencies required to assume those positions and assesses their potential.

4.4. Create an action plan for successors

Creating an action plan for potential successors helps align their training and development needs with the position they will fill.

4.5. Take care of their commitment

Everything you've worked on so far won't do much good if you don't pay attention to employee motivation and engagement.

5. How to create a Succession Plan with a 9 box

The 9-box matrix is used as a method for succession planning by assessing an organization's current talent and identifying potential leaders. When performance and leadership potential are assessed and plotted on the matrix, individuals in the upper right quadrant (quadrant 1) are identified as high-potential candidates for succession, while those in the lower left quadrant (quadrant 9) a new action plan urgently to improve your situation or to consider whether you are in the most suitable position.

The 9 box talent matrix is a tool that evaluates the level of current performance and the level of potential of an employee in the organization. Although in Hrider you can choose which axis to place each variable on, typically, the vertical axis of the map indicates growth potential and the horizontal axis identifies whether the employee is currently below, meets, or exceeds performance expectations. The intersection of the two determines the current position of the employee and where development may be needed.

The boxes on the grid indicate where to invest to develop future leaders. Those people in chart 1 should be ready for senior leadership within 6 months to a year; those in slots 2, 3, or 6 have a longer timeline, but can prepare for an eventual move to slot 1.