Leading an organization requires a special blend of skills. You need core competencies that get the job done, behavioral habits that instill trust and respect in your team and a fundamental alignment with your organization’s mission and values. Finding outside hires that meet these criteria takes significant time and effort, and sometimes even a little luck. 

Developing these leaders from within your organization, however, offers a greater opportunity for success. You know the individual you choose is capable of the job, keeps positive relationships with their team and is aligned with your culture. But to develop team members for their next level of leadership, you need a plan.

That’s why leadership succession planning is so important in any organization. It helps you identify top talent early and invest in internal candidates who are hungry to achieve—which fills your organization’s leadership pipeline. But many organizations underestimate how much time and forethought it takes to create a successful succession plan. 

In this blog, we’ll discuss exactly why you need a leadership succession plan, how to create one and how to develop a new generation of company leaders along the way.

The Importance of Succession Planning

Leadership is the defining factor of a company’s success. Even with a great leader from the outside, a new leader costs an organization 12-18 months of effective leadership as they  get to know your business and team and build trust with employees and stakeholders. 

Having a planned succession significantly decreases that timeline because you’re bringing up someone who already knows your business. It allows you the time to develop the appropriate skills and teach the necessary strategy to someone before they assume a higher role in your organization. So when they step into that position, they’re ready to hit the ground running. 

Aside from the person taking the role, succession planning also benefits the person leaving it. Many C-level and senior executives will leave their roles in favor of retirement, which means they need a plan for finishing well. Through the succession planning process, these people can establish what work they need to complete to satisfy their personal goals and meet the needs of board members and the company. It also gives them a chance to assess how they can best set up a potential successor to meet their goals once in the position.

Succession planning isn’t just about executive roles, though. When you promote from within, it often has a ripple effect on your organizational chart, creating vacancies in key positions at all levels. As people move up, you’re responsible for filling their roles as well, which can often create more than one hole to fill. If you’re planning for this, then you can confidently approach hiring or promoting into each open position.

Embracing new leadership affects your entire organization. To do it well, you need to spend time continually creating opportunities for employees to gain new experiences, demonstrate their success and show they’re capable, credible leaders. That way, when they move into their next role, they’ve proven they’re ready for the responsibilities and there’s no lag time between stepping in and stepping up.

Creating a Succession Plan

Succession planning isn’t a one-time event. It’s part of how you lead your organization. Your succession plan should be as fundamental as your financial plan—an ongoing cycle that happens every year and is updated each quarter. For best results, you need to continually assess your talent pool and timeline. 

Who to Consider?

Companies that are great at succession planning start at the ground floor. They look for people at the front of the organization and identify those who are interested in growing and moving up. These are the individuals who they’ll focus on when providing professional or leadership development opportunities, with the hopes they will eventually move into the organization’s talent pipeline.

It’s important to invest in these employees early on. Give them opportunities that will help them develop leadership skills and subject matter expertise in their field, such as leadership development programs, professional development workshops or mentoring arrangements. Combine these focused efforts with encouragement to become a skilled generalist, and you’ll build a well-rounded future leader for your organization.

The most critical part of developing high-potential team members for leadership positions is to do so continually. Every time they move up in the organization, take the time to assess their skills, their career goals and what gaps they need to bridge to reach them. Help them create development plans and continue providing them with opportunities to take on more responsibility and work cross-functionally.

Think of succession management as a stair-step path to the top leadership roles in your company. At each step, your team members will have different needs and challenges, and it’s your job to help them develop the skills they need to keep climbing to the top.

When to Start?

It’s critical to start succession planning as early as possible because it takes much more time than most people realize. It’s not just about lining up potential leaders to take on critical roles, it’s also about making sure they’re ready to step into that position and the person leaving is ready to finish well.

Oftentimes, effective succession planning starts years out from when an executive plans to leave the organization. This gives them time to assess their final goals and work with their successor to ensure they have the skills and capabilities needed to succeed. In addition to this talent assessment, senior leadership teams need to be sure that person will further the organizational culture and mission.

Remember that your pool of future leadership isn’t populated by just one person or position. You’ll likely have a few roles to fill when a single executive leaves. For this reason, it’s wise to start your talent management efforts earlier rather than later. This gives potential candidates the time they need to develop and master different areas of their professional acumen so that you have a handful of qualified people to choose from when the day comes.

Succession planning makes a huge difference when it comes to choosing the right leader for your organization. Having someone who’s aligned with your company mission and vision, exemplifies your company culture and has the skills to perform well in their role will have a huge impact on your organization and its success. Starting early gives you the best chance of making honest assessments of your talent bench and choosing the right person for the job.

Tips for Developing Leaders

As you’ve probably noticed, developing leaders is the bulk of the work in succession planning. For the best results that support your business strategy, you need to focus your efforts and assessments on two main areas: what encourages success and who embodies your organizational goals. 

What Encourages Success?

The answer to this question will be unique to your organization. It’s those things that help your people become successful within your company, but it goes beyond just professional development exercises and workshops.

In every organization, there are two core areas that build success:

• Competencies – functional skills, work experience and subject matter expertise that set an employee apart from others

• Behaviors – cultural fit in values and beliefs, emotional intelligence and relationship skills that make someone a trusted member of their team

Potential leaders need to develop both of these areas to be an effective leader at all levels, whether they’re the department head, executive director or CEO. Focus on creating opportunities for your employees to exercise the above skills and develop these core aspects of effective leadership.

Who Embodies Our Goals?

Part of this strategic planning is to ensure you choose someone who embodies your organization’s culture and will strive to reach its goals. These personal characteristics can be incredibly helpful when it comes to identifying talent that would be a good fit for senior leadership roles. 

People grow and change as they learn, which is why it’s imperative to review your talent annually. Ensure those people who were passionate last year are still engaged and energized and take the chance to find new people coming into their skills. You can provide opportunities that help move each person along and develop the core competencies they need.

An annual review is also how you identify who you want to develop through new experiences, who might be ready to move up in the organization and who needs more time to hone their functional skills and relationships. 

Plan Your Organization’s Future

If this seems like a ton of time and effort to dedicate to the succession process, then you’re right. That’s why employing the help of your current leadership team is instrumental to your success. 

Leave it to managers and supervisors on all levels to develop their own successors, whether or not they plan on moving up or out anytime soon. Each team should have more than one person who could step in and take the reins if needed. This increases accountability for all current leaders and ensures you have a deep bench of talent ready to step up when your organization needs them.

The hallmark of a great leader is putting organizational success before their personal ambition. They take the time to plan succession so the organization is in good hands when they leave. And during that time, they take care of themselves so they can lead well. To learn more about leading well, watch our video about The Importance of Executive Well-Being.