Any leadership change—planned or sudden—poses a risk to your business and can impact everyone from shareholders to employees. But there is a way to cushion the fall-out: having a succession plan in place is crucial for companies to ensure the business continues running smoothly in the event of changes such as resignations, retirement or layoffs.
At its core, succession planning is about identifying and developing future leaders across levels and functions so that when someone exits, you’re not scrambling to find a suitable replacement.
In fact, when done right, succession planning can give businesses a long-term competitive advantage by ensuring they have the right talent, smarts and skills to achieve their business goals. Yet, many businesses don’t have a solid succession plan in place.
Here are a few tips from Kittisak (Golf) Saithong, Managing Director of RGF Executive Search Thailand on how you can approach building up the leadership pipeline.
It’s an ongoing plan
Don’t think of succession planning only when you need to hire someone in a leadership role. Companies that view it as a one-time effort are often disappointed with the results. Instead, think of it as a development process so that you’re always prepared to fill crucial positions with experienced internal candidates in the event of any sudden departures. Start by identifying a range of key jobs, including future-looking roles that your company may not yet have in place. Next, evaluate your current capabilities to find the gaps you potentially need to bridge via training and development.
Identify key roles for succession planning
While CEOs are a crucial part of succession planning, it’s important to look at other critical positions that are hard to fill. Additionally, don’t just plan for people who are retiring—think about the future and the roles that are going to shape the company’s direction, goals, values and vision. Once you identify key roles, start by understanding the knowledge, skills and abilities required to perform in the role. This will help you pick potential employees to offer training or mentorships to develop mission critical skills.
Don’t make it a HR function alone
Don’t relegate succession planning to HR alone. The company’s leaders must understand the importance of succession planning and be actively involved in its implementation, including by directly providing training. To ensure the leadership team is partly accountable, companies must link compensation with succession planning metrics.
Implementation is crucial
There’s many ways to implement succession planning: training someone from within, career development of employees for future roles and responsibilities, career Management in creating now roles, replacing or directly hiring someone with the right experience and wider view to take the company to the next step. However you decide to go about it HR and leadership teams must clearly communicate processes and procedures and track their performance against it.
Keep evaluating your efforts
Although succession planning is an ongoing initiative, it’s important to take stock regularly with monitoring and periodic check-ins. Some metrics to consider are the reduction in the cost of turnover, the percentage of key vacancies filled by internal candidates and the total number of successful promotions.
Showcase your success stories
Succession planning is nothing if we don’t have outcomes and examples to follow. So, showcase your success stories, or you may risk your competitors getting in touch with them about an exciting opportunity.
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