Published by Kathy Harvey March 22, 2021
6 benefits of succession planning
Having a plan that enables you to regulate and maintain workforce stability and organizational capability brings with it several positive effects. Below we explain 6 benefits of succession planning for your organization to consider.
- protect the business from sudden, unexpected change
Perhaps most importantly, succession planning contributes to the resilience of your organization in the face of sudden change. It’s easy for business leaders to be too swept up in the day-to-day to notice patterns affecting the workforce. And it’s easier to replace your employees as positions become vacant. But if you take this road, your talent strategy will always be focused on external resources, which as we explain in our article 8 steps to successful succession planning, we think is unsustainable.
Without succession planning, you’re taking for granted the health and loyalty of your workforce. What would you do if one of your top employees developed a long-term illness or was poached by a competitor? Sure, you might be able to recruit effectively to replace them but how much will that cost you, in terms of fees, increasingly competitive salaries and loss of intellectual capital?
- reveal vulnerabilities and highlight skills gaps
Continuing on this theme, succession planning provides a risk assessment that will uncover vulnerabilities and gaps in your workforce and skills base. By reviewing your current organizational structure by department, you can begin to see points of weakness that could impact your business strategy.
With this knowledge, you can take action well in advance to mitigate these risks and motivate your top talent in the process. In essence, succession planning shifts the focus of talent planning from external to internal.
- promote training and development
It’s worth remembering that succession planning doesn’t have to be about linear career progression. If there isn’t a clear path for your best people to progress, they could end up leaving the organization – unless you’re able to provide alternatives.
Supported by a well-rounded training and development program, succession planning can highlight opportunities for employees to move laterally into positions that have skills in common. This opens up possibilities for a rewarding career that your best people might not have considered.
A good training and development program shouldn’t just provide courses and learning materials, it should also offer opportunities for coaching, mentoring, job shadowing and support for professional certifications.
- knowledge transfer and process refinement
When experienced employees retire or leave the business after a long tenure, they take with them a font of knowledge that will be hard to replace. One of the aims of succession planning is to stop this drain on the business and smooth the transition of such changes.
By prioritizing succession paths that involve employees whose departure from the business is planned or otherwise anticipated, knowledge can be passed on to those who will take up the reins. Most retiring employees will be happy to help rather than see such an important product of their labour go to waste.
Alongside knowledge transfer comes the opportunity to review processes and procedures, to question existing methods and look for opportunities to improve them. Ambitious succession candidates will be open to the recommendations of outgoing colleagues concerning pitfalls and weaknesses, as this presents a chance for them to make an early impact.
- long-term talent planning and retention
Another important benefit of succession planning is improved retention of your top employees by offering them clear opportunities for growth. By planning longer-term, organizations can reduce their reliance on recruitment, so that talent is only sourced externally as a last resort.
Your succession plan should be closely aligned with the business strategy, so that it provides answers to talent questions relating to organizational growth, business expansion and innovation. You might think this is what strategic workforce planning does, but succession planning differs in that it actively pursues workforce continuity rather than workforce resourcing.
- preserve brand integrity and reputation
When done badly, succession planning can have an impact on the business beyond its remit, particularly for publicly visible positions. There are many examples of failed c-level succession plans that have caused substantial reputational damage to the organizations concerned.
When a senior executive comes into the organization from outside, it’s vital the leadership team takes steps to ensure the new appointee understands the values that bind its people and business. Rash attempts to impose change and make a mark could undermine the organization’s core purpose and overlook the needs and expectations of both customers and employees. This is a very real concern, as the Disney example below illustrates.
By placing the emphasis on internal succession to senior positions, these threats have less chance of materializing, as senior leaders are more likely to understand what’s right for the business and its people. Microsoft CEO Satya Nadella is an excellent example of this.
when succession planning goes wrong
Disney has a track record of disastrous succession planning but its most notable failure was then-CEO Michael Eisner’s choice of the company’s new president in 1995. Eisner brought in Michael Ovitz from the Creative Arts Agency instead of appointing colleague Jeffrey Katzenberg as expected.