The Value of a Structured Succession Planning Process

“One of the things we often miss in succession planning is that it should be gradual and thoughtful, with lots of sharing of information and knowledge and perspective, so that it’s almost a non-event when it happens.”

– Anne M. Mulcahy

Why is having a long-term, structured succession planning process important?   

Succession planning is a strategic process that enables organizations to identify, develop, and promote internal candidates to leadership roles. It requires time and effort, and some organizations may view it as an unnecessary investment of limited company resources. However, when employees eventually retire or unexpectedly leave, these organizations must then rely on replacement hiring. Rather than planning ahead for structured succession, these organizations react to immediate needs in an ad-hoc manner.

The external hiring process can be costly. Recruiting, screening, negotiating, and training all require significant time and financial resources. Additionally, external hires need time to adjust to their new roles and standard organizational procedures. During this transition, other employees may need time to adjust as well, impacting workplace coordination and productivity. Overall, unplanned transitions can not only become a financial burden for organizations, but can also disrupt organizational flow in unexpected ways, lowering employee morale.

Through succession planning, organizations adopt a proactive approach by identifying and developing internal leadership candidates in advance. However, for a succession plan to be effective, organizations must do more than simply create a list of adequate and convenient candidates who may replace more senior employees. An effective succession planning process also requires structure. Organizations should provide candidates with relevant resources and developmental opportunities and formally track their progress over time to maximize the impact of the plan.

The Value of Structured Succession Planning

Structured succession planning keeps candidates invested in their professional growth through the measurement of developmental goals. By formally monitoring progress towards targets, a structured succession plan motivates individuals to achieve their professional development goals by holding them accountable[i]. This process is not meant to be a way of penalizing candidates who do not meet their goals. In fact, skill development takes time. It is completely normal for progress to stall at times, and a decline in progress may indicate that adjustments are needed. Although structured succession is a formalized process, it is also flexible. When goals are not being met, organizations can provide candidates with additional tools and experiences, or simply more time for improvement. Providing resources for growth demonstrates the organization’s investment in its employees and empowers candidates to be fully prepared for their new roles.   

Structure Supports Succession Candidates

A structured succession plan demonstrates organizational commitment to employee development and aids in the retention of employees. Employees who know that opportunities for advancement are available to them feel more motivated and engaged in their work, and are less likely to leave the organization. Additionally, developing a talent pool before it is needed increases organizational resiliency, as organizations can anticipate, prepare for, and adapt to change, especially in a competitive labour market.

Structure Supports Operations

A structured succession plan not only helps in retaining and motivating candidates who are chosen for succession, but also others in the organization. A formalized process facilitates communication and transparency, which, in turn, improves employee engagement and perceptions of workplace fairness. It may also help in tackling legal concerns. When opportunities for advancement are provided based on objective decisions, organizations can avoid inadvertently contributing to workplace inequality. If legal problems do arise, having clear documentation about employee progress and promotion decisions can help protect organizations and demonstrate their credibility.

Structure Supports Communication

Finally, structure in a succession plan facilitates transparency and helps organizations to effectively communicate succession goals. Key stakeholders may be interested in objective metrics, such as the proportion of roles that are filled internally, the length of time before candidates are ready to advance, or training cost comparisons. A structured plan is able to deliver these metrics, making it easier to effectively communicate the plan — especially to those who don’t believe in the process. A structured process may also aid in tracking subjective metrics, such as job satisfaction or employee morale. Although structured succession plans require a commitment of time, money, and effort, the transparency and clear communication afforded by structure are important long-term benefits of this process.   

Overall, a structured succession process can improve employee accountability, organizational resiliency, retention, workplace communication, legal defensibility, and stakeholder satisfaction. Structured succession planning thus enables organizations to develop and act on a long-term plan that is in line with their vision and values.

Structured Succession Planning in Action

To demonstrate the value of structured succession planning, consider the following hypothetical case study:

Jane was a high-performing junior employee who was selected as a succession candidate to move into a middle management position. However, her organization did not develop a structured process, and Jane’s inclusion in the succession plan was not communicated to her. In fact, she privately felt that she was not valued by the company, given a lack of any apparent recognition of her hard work.

When Jane eventually learned she was being promoted due to a supervisor’s departure from the company, she was initially excited. However, her transition did not go smoothly, negatively affecting her motivation and satisfaction. Jane was simply assigned to the role and given new responsibilities without any preparation or opportunities for development. Moreover, other high-performing employees did not understand why Jane had been selected instead of them, lowering overall engagement and perceptions of fairness.

By rewarding high-performing employees with promotions that do not come with sufficient training or communication, organizations may be setting them up for failure. A structured succession planning process allows organizations to better recognize their employees’ developmental needs and, in this case, could have better prepared Jane to advance to the more senior role.

Jane ultimately adjusted to her role, but only after a period of lost productivity and low morale, which could have been avoided with a structured process. Based on her experience, Jane advocated for and developed a structured succession plan for future personnel decisions. A few years later, when Jane’s colleague unexpectedly left the company during a highly competitive market, an internal candidate was already prepared for advancement. Because the succession process was structured, and employee progress was formally measured, other leaders agreed with Jane’s assessment that the chosen candidate should be promoted. Moreover, the overall succession plan was communicated to the entire organization, improving perceptions of fairness and transparency. Overall, the organization benefited from improved organizational resiliency, a seamless transition, and high employee satisfaction.

Looking for More?

Would you like to know more about SIGMA’s succession planning services? Talk to one of our experts! Glen Harrison helps leaders and HR professionals better understand how SIGMA’s solutions can be used to realize potential within their organizations. Contact Glen today to learn how SIGMA can help your organization create a customized and effective succession plan.

consultant

Glen Harrison

Glen Harrison oversees SIGMA’s succession planning consultants and helps leaders and HR professionals utilize SIGMA’s products and services to realize potential within their organizations.

1 – 800 – 401 – 4480 ext. 233

[i] Harkin, B., Webb, T. L., Chang, B. P., Prestwich, A., Conner, M., Kellar, I., Benn, Y. & Sheeran, P. (2016). Does monitoring goal progress promote goal attainment? A meta-analysis of the experimental evidence. Psychological Bulletin, 142(2), 198. https://doi.org/10.1037/bul0000025

About the Author

Helen Schroeder

Marketing Coordinator

Helen completed a dual degree with Ivey Business School’s HBA program and Western University’s Honours Specialization in Psychology. As a Marketing Coordinator and Consultant she creates and manages content for SIGMA’s webpages, blogs, and coaching resources. Helen also assists in new product development, go-to-market strategy, and client consultation.