A succession plan is vital to the long-term survival of any business. Ironically, the majority of firms don’t seem to realize this and often do not take the process seriously. Therefore, it’s useful to start a best practices section at the true beginning: creating the business case for succession planning.
The business case for succession planning requires some ground work, but once the pieces have been put together, it becomes clear. For instance, create diagrams that show how many people in your organization, and especially in key, strategic positions, will be retiring in the next 10 years. The baby boom exodus in these ranks may surprise you. In addition to the replacement of key strategic employees, succession planning also ensures that the best and the brightest talent from lower ranks is developed into tomorrow’s leadership force. Furthermore, succession planning will help to ensure that decisions about the generation of leadership are made based on fact and performance—helping to avoid underperformers from being grandfathered in.
On a hard-factor side, succession planning will ensure that an organization’s strategy can be successfully carried out in the future—and also by the most capable people in its workforce. Finally, succession planning can help increase employee morale, reduce turnover and encourage employees to develop themselves while increasing their own performance.
Overall, if succession decisions are left to chance or to individuals, the probability of poor decision-making increases drastically. While it may be difficult to quantify the exact costs of these mistakes in the present, leaders should be able to acknowledge their consequences and understand why succession planning is therefore necessary.
Rothwell’s book, “Effective Succession Planning”, does a great job of explaining this process in more detail. It is available here