You Need a Succession Plan—Here’s Why
So, your organization is growing. That’s great! Does your organization have a growth plan? What about a succession plan? If you said “yes” to a growth plan, but “no” to a succession plan, that’s a problem.
Because while a growth plan prepares your organization for the road ahead, it doesn’t show your people how to grow along with the organization. In other words, having a growth plan without a succession plan is like building a skyscraper and forgetting to add the elevator.
What’s the Difference Between a Succession Plan and a Growth Plan?
A growth plan outlines how an organization expects to grow, then identifies upcoming needs to support that growth. A typical growth plan might include:
- An overall business goal
- A list of components needed to reach the goal
- A timeline with checkpoints or stages of development
- An initial budget
- An outline of the marketing strategy
- Infrastructure, hiring, and other essential needs
On the other hand, a succession plan focuses on what you need to provide employees in order for them to advance within your organization. And while many organizations have growth plans, most do not have a formal succession plan in place—in other words, while they’ve planned out their upcoming organizational needs, often including new management roles, they have no consistent strategy to identify strong internal candidates and help those employees fill the roles in that growth plan.
The Benefits of a Succession Plan
Considering the scarcity of succession plans, you might conclude it’s better to hire from outside; but in fact, internal hires outperform external candidates in significant areas like time-to-contribution, length of service, and more. Knowing this, many organizations prefer to promote from within, and some even make it part of their stated culture. These organizations and their employees benefit greatly from succession planning.
Benefits of Succession Plans for Organizations
A succession plan is a great idea for any organization, regardless of its hiring philosophy. Some of those benefits include:
- Saving money: A succession plan sources candidates from inside your organization, so you spend less on recruiting, not to mention onboarding and training.
- Stronger internal hires: According to Gallup research, 82 percent of managers are chosen for their performance, not their managerial skills. Because a good succession plan allows you to gauge aptitude and enthusiasm, it acts as a prefilter for employees you’ve marked for advancement.
- No lengthy vacancies: It’s impossible to predict when a great candidate will arrive to fill an opening, and a long delay can throw a huge wrench into your organization’s expansion strategy. By preparing employees in advance to step into new roles as soon as they open, you can eliminate that big question mark in your growth plan.
- Creating a foundation for career development: This is a big priority for young candidates, and a succession plan is a clear indicator that you are willing to invest in your workforce and guide them forward.
- Increased employee engagement: A succession plan shows you value your people, provides recognition and rewards for high performers, and gives employees a clear goal to work towards beyond the business objective. In short, it’s an engagement goldmine.
- Minimal downtime, maximum performance potential: A succession plan that includes cross-disciplinary training and skill development can expand your workforce’s existing capabilities, making your organization more versatile, more productive, and less vulnerable to absences and bandwidth bottlenecks.
Benefits of Succession Plans for Employees
What’s good for an organization isn’t always good for its people, but succession plans are definitely great for both employers and employees alike. Here’s how your employees can benefit from a well-designed succession plan:
- They’ll feel like a million bucks: The fact that someone is willing to invest time, effort, and money into their development makes employees feel like they’re valued for their potential, not just their current performance.
- They’ll gain a sense of purpose: Some organizations serve a noble cause, while others create a sense of ownership with profit sharing or stock options. For those who can’t do either, a succession plan provides a clear path to advancement and fights the feeling of aimlessness that creates disengagement and turnover.
- They’ll feel more prepared: Whether it’s to lead a big project or take on a management role, stepping into the spotlight can be scary. A succession plan can put employees at ease by creating space and time to ask questions and make mistakes before things get real.
How to Design a Succession Plan
A succession plan is like a growth plan for people. It includes similar elements to a growth plan, but it’s focused on employee development. A complete succession plan should have:
Overall development goal(s)
You might be looking for employees to develop into managers, to become competent in cross-disciplinary roles, or to expand their own skills and become experts in an area the organization has plans to enter. Or you might have a plan that can achieve different goals depending on the need.
A list of requirements
This could be anything from minor tasks and books to read to course completions and successful leadership of projects. In essence, this is everything an employee has to do in order for the organization to consider them ready for their new role.
A timeline for succession
In order to match an employee’s development plan to your organization’s growth plan, you need to know when to begin. A timeline tells you how much time development will take and offers a way to grade the employee’s progress as well.
From buying books and software to estimating the hours your succession plan will take from an employee’s workweek, it’s essential that your budget falls within what your organization can handle as it works towards its overall business goals.
The “how” of your succession plan outlines the methods you will use to introduce, conduct, and measure the process. That could mean any or all of the following:
- A reading list of books or online courses
- A mentoring or shadowing program
- Accepted classes or institutions
- Internal training materials
- A defined trial period or series of evaluation tasks
Your strategy should also include your methods for determining whether an employee is making the grade at every stage. This could involve a simple checklist, a test or graded project, some sort of peer/manager review, or a combination of all three.
Why a Succession Plan Should Be Your Next Investment
We’re taught from a very young age that it’s a good idea to plan for the important things in life, and doing so often comes down to money. When it comes to business, many organizations are so wary of their finances that they become hyper-focused on planning how to spend wisely as they grow. To that end, it’s much easier to calculate how many desks you’ll need next year than it is to quantify the return on investing in the people sitting behind them. But more than any product, it’s the people who bring value to an organization—and that makes people the wisest possible investment.