Table of Contents

1. DEFINITION & MEANING OF SUCCESSION PLANNING...................................... 2

2. ELEMENTS OF SUCCESSION PLANNING ............................................................... 3
3. STEPS OF SUCCESSION PLANNING ........................................................................ 4
4. ADVANTAGES OF SUCCESSION PLANNING......................................................... 6
5. DISADVANTAGES OF SUCCESSION PLANNING .................................................. 7

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1. DEFINITION & MEANING OF SUCCESSION PLANNING
Succession planning is the process of selecting and developing key talent to ensure continuity
of critical roles.

It is a plan that focuses on identifying and developing employees in order to help them
advance within an organization. Succession planning is important because, as an organization
grows, it’s more cost effective to develop current employees for key positions rather than hire
new people. Giving employees a clear path forward in their careers via a succession plan can
also boost engagement and retention.

Succession planning establishes a process to recruit employees, develop their skills, and
prepare them for advancement, all while retaining them to ensure a return on the
organization's training investment. Succession planning involves understanding the
organization's long-term goals and objectives, identifying employee development needs, and
determining trends.

Unfortunately, many organizations don’t prioritize succession planning, choosing to focus on

how to grow their business rather than their people. Among organizations that do have some
sort of succession plan, 54 percent take an informal or mostly informal approach, and the
majority don’t believe their succession plan is effective.

Succession can be from within or from outside the organization. Succession by people from
within gives a shared feeling among employee that they can grow as the organization grows.
Therefore, organization needs to encourage the growth and development with its employee.
They should look inward to identify potential and make effort to groom people to higher and
varied responsibilities. In some professionally run large organizations, managers and
supervisor in every department are usually asked to identify three or four best candidate to
replace them in their jobs should the need arise. However, the organization may find it
necessary to search for talent from outside in certain circumstance. For example, when
qualified and competent people are not available internally, when it is planning to launch a
major expansion or diversification programs requiring new ideas etc. Complete dependence
on internal source may cause stagnation for the organization. Similarly, complete dependence
on outside talent may cause stagnation in the career prospects of the individual within the
organization which may in turn generate a sense of frustration.
Succession planning provides managers and supervisors a step-by-step methodology to utilize
after workforce planning initiatives have identified the critical required job needs in their

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organization. Succession planning is pro-active and future focused, and enables managers and
supervisors to assess, evaluate, and develop a talent pool of individuals who are willing and
able to fill positions when needed. It is a tool to meet the necessary staffing needs of an
organization/department, taking not only quantity of available candidates into consideration,
but also focusing on the quality of the candidates, through addressing competencies and skill
gaps.

2. ELEMENTS OF SUCCESSION PLANNING

Succession planning is not about replacing an existing employee. The purpose is to prepare
the organization and develop its “bench strength” for future organizational requirements.

There are five elements to managing a succession process:

1. Identifying key positions for which a succession plan is necessary:
The organization may have a couple of key positions or it may have many. The chief staff
officer role is definitely one to be included in the succession plan. When deciding which
others to include, consider:
 Is this a key role critical to the success of the organization, and if the person in this role
suddenly leaves or is unavailable and the position becomes vacant is the organization at
risk?
 Is this move a logical next step? Most organizations will focus on senior managers or
supervisors as the second level for succession management (after the CEO, which is the
first level).
 Does the person currently occupying this position hold a good deal of knowledge about
processes or other institutional memory that will effectively leave when the incumbent
departs the job? For example, the job procedures and outcomes are not fully
documented.

2. Identifying the successor or successors:

The organization may have more than one employee who has demonstrated the
knowledge, skills, potential, and the interest to develop to a level of additional
responsibility. The commitment to the process, and abilities, of the succession candidate
are integral to identifying who to develop.

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3. Identifying job requirements:
The task is to understand what requirements will exist within one or more key positions in
the future. This creates an inventory of skills and attributes that will serve as a checklist to
audit what a succession candidate presently offers and needs to develop.

4. Building competencies:
The succession planning process must look at building the competencies and skills for
current and future organizational needs. It has been correctly observed that succession
planning is about “what is next?” not just “who is next?” There will be one set of
competencies (i.e., knowledge, skills, and abilities) for each position. However, in creating
a development plan to build the competencies of succession candidates to be ready for the
intended future role, there will be different development plans for each succession
candidate.

5. Assessing progress:
As the father of modern management, Peter F. Drucker, correctly observed “what gets
measured gets done.” It is essential that the organization that creates a succession plan, and
invests in the development of employees, assesses its progress toward the intended
outcome.

3. STEPS OF SUCCESSION PLANNING

Bhattacharyya (2008) states that succession planning involves a few steps, which are
discussed below:

The first step is to prepare and develop a management staffing and plan for all anticipated
needs in different time frames.

The second step is staffing and development. Staffing is concerned with recruitment,
selection, and placement. Development of managerial personnel is done through training, job
rotation, projects and board assignments, performance appraisal, counseling, and guidance.

The third step is to ensure a congenial organizational environment to retain the desired
managerial personnel.
The fourth step is to develop a good performance appraisal system to get feedback on
managerial performance and to review their progress and shortfalls.

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Preparation of the management resource inventory is the final step in succession planning.
Such inventory contains details of personal data, performance records, skills, potential career
goals and career paths of managerial personnel.

Moreover, following are the steps to ensure effective succession planning:

1. Establish measurable goals to guide the succession planning program. Closely align the
measurable goals of your succession planning program to the organization's measurable
strategic goals.

2. Recalibrate succession planning program goals on an annual basis. Assess changing

competitive and organizational conditions and priorities.

3. Prepare current job descriptions so that the work to be performed is clear.

4. Prepare competency models by level on the organization chart. Use a rigorous

examination of objective performance requirements. Plan for future competencies that are
necessary to achieve future strategic goals. Ensure all competency models are clear and
measurable.

5. Carefully define the roles to be played by each key stakeholder group in the succession
planning process. Key stakeholders include the board, CEO, senior executives, middle
managers, supervisors, and even workers. Keep senior managers and other stakeholders
engaged in the succession planning program by establishing clear, measurable
accountabilities.

6. Establish talent pools by levels based on the strategic strengths of the organization.

7. Take an inventory of your talent. Ensure that individual strengths and areas for
improvement are recognized. Conduct talent reviews on a continuing basis to ensure that
promotable individuals are being properly developed over time.

8. Evaluate the entire succession planning program on a regular (usually annual)

basis. Compare processes and results against the measurable succession planning goals
established at the beginning of the yearly planning cycle.

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4. ADVANTAGES OF SUCCESSION PLANNING

Staffing is the number one challenge facing most companies today, and succession planning
is often the most effective remedy. With its proactive approach to staffing needs, emphasis on
employee development, and focus on career growth opportunities, the benefits offered by
succession planning are numerous.

A variety of factors can cause a position to become available including business growth and
expansion, promotion or transfer, medical leaves, resignation or termination, or retirement or
death.

Succession planning allows you to anticipate key staffing needs before they become
“emergency” situations. It also enables you to:
 Minimize the potential for gaps in your team.
 Ensure continuity of staffing.
 Prevent premature promotions.
 Avoid transition shortcomings when employees are promoted.
 Ensure ongoing availability of leadership talent.
 Work toward improving the diversity in our workforce, which is critical to our
ongoing success and growth.
 Choose the best person for the position, rather than the best available person.

Due to its strong focus on developing internal talent, succession planning can help avoid
some of the risks associated with hiring new talent. Companies generally have better
information about internal candidates than external ones.

An organization’s reputation for training and development, coupled with career growth
opportunities, has been proven to play a significant role in:
 Attracting quality candidates.
 Motivating existing employees.
 Retaining top performers.
 Building employee satisfaction.

Succession planning involves evaluating performance and identifying the succession

readiness of employees. It allows you to determine:
 The percentage of high performers or potential high performers.
 The number of marginal or inconsistent performers.

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This, in turn, helps you evaluate how well you have been:
 Recruiting, interviewing, and hiring.
 Training and developing your team.
 Managing employee performance.

Succession planning helps maximize your team’s competency and effectiveness in the long-
term, ensuring the ongoing success of your organization.

5. DISADVANTAGES OF SUCCESSION PLANNING

Businesses use succession planning more commonly today than in the past. This planning
allows leaders to identify and coach those who may succeed them in the organization. Once
identified, selected individuals get extra training and development that will help them to
move into the new role. When done well, this can deliver a seamless transition from one
leader to the next. However, there are disadvantages to succession planning that leaders
should note.

1. Narrow Focus:
Succession planning allows leaders to focus on potential new managers who are
employed by the organization but does not allow for candidates outside the company. In
many cases, managers will consider only their direct reports as potential successors. This
is good in terms of career development for those inside the organization, but it does not
necessarily meet the company´s best interests. In some situations, it is better to replace a
manager with an external candidate to bring new skills to the team. Other times, there
simply may not be a suitable candidate within the organization.

2. Negative Effects on Motivation:

It is not always totally clear cut whom a manager should prime for future leadership. In
some cases, there may be two or more strong candidates for the role. If leaders do not
handle succession planning carefully and objectively, others may see the person being
trained for leadership as favored. This can lead to motivated individuals losing interest
and not trying as hard in the work place. It may have the effect of making those
employees think it is not worth their effort if there are no progression possibilities.
Managers need to carry out succession planning carefully to avoid motivational issues.

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3. Family Rivalries:
In small, family-run businesses, succession is an issue that is very important. If the head
of the organization dies; a child will replace that person in many situations. If the parent
favors one child over another and if this is not considered to be fair, it can have a
catastrophic effect on the small company. Family rivalries can cause a business to fall
apart if not addressed effectively.

4. Organizational Structure Changes:

Succession planning sometimes takes place even though an organization's structure may
not be completely stable. Leaders need to develop and change organizations so they can
survive to meet new business challenges. Sometimes a person may be developed for a
role in the organization that may not exist in the future. This can have a negative impact
on motivation of the earmarked individual. In addition to this, training costs money. If the
company's leadership later eliminates the position, it will have wasted resources
developing a person for a role that no longer is needed.

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