Why Now is the Time for Succession Planning, Even if You Don’t Want To

Denying the importance of succession planning doesn’t make you more important to your company. It simply makes those who will need to take over less prepared. Can you think of any leader who would want to leave a disorganized exit as an end post to their legacy?

Succession planning can feel different than other business planning. You have worked hard to be where you are, and looking toward the end can make your exit seem more imminent. Some leaders may even think that if they delay succession planning or ensure there is no one to take over, they can’t be told it’s time to consider other options. But even if you’re not ready to hang up your cleats today or any time soon, every leader needs to understand the importance of succession planning.

Here’s Why Succession Planning is Critical

A successful succession plan identifies and develops future leaders within your organization to make sure they can pick up where you leave off. Creating a succession plan helps ensure your company thrives and succeeds, even after you have moved on or retired. But it’s not all about your role and your contributions. There should be a succession plan(s) for key leadership positions throughout the company.

Age (of leader) has nothing to do with the need for a plan. Leaders sometimes make unexpected exits, whether for health or professional or legal reasons. According to the Bureau of Labor and Statistics, the median management-level tenure is 6.2 years. Think of succession planning as insurance. Just as you have car insurance, your company’s key positions must have the coverage to ensure long-term health of the organization as well as your professional reputation.

Succession plans first identify the necessary skills and competencies required for each key position. They also contain directives and/or detailed programs/pathways to discover, develop, and nurture employees who possess the identified qualities to fill those roles when needed.

Succession planning is essential for organizations of all sizes and types, especially family-run businesses. In consulting with leaders for smaller or family-run businesses, we are often told the succession is “handled.” While leadership may have already determined the next in line, the knowledge gaps may not be accounted for. A formalized succession plan is necessary even when you know who will be stepping into the role.

Here are a few reasons why you need a formalized succession plan.

Continuity of Operations
Succession planning ensures that your organization has a plan in place to continue operations seamlessly, even when key leaders leave. The plan helps to mitigate the risks of unexpected vacancies and allows the company to avoid disruptions to operations.

Talent Retention
Succession planning provides a clear path for employees to advance within the organization, which helps retain top talent. Employees are more likely to stay with a company with opportunities for growth and development. A succession plan/career pathway identifies what the company is looking for in its key positions and helps junior employees see a path to leadership by recognizing the essential skills required in those positions. It also helps managers identify up-and-coming leaders for future key positions and helps them develop potential future leaders.

Being open about expectations and requirements also allows companies to be more diverse in their recruiting efforts since most leadership roles require growth and maturity and are not something any employee can take on overnight. A succession plan can detail ways to cast a more diverse net when looking for leaders, such as tapping future leaders in non-traditional areas for promotion.

Organizational Growth
Developing a talent pipeline of potential leaders helps to support organizational growth. Organizations can strategically plan for the future by identifying and developing the right people to lead the way. It also adds a layer of confidence that leaders are looking to the future and evaluating employees poised for growth.

Reduce Costs
Succession planning can reduce costs associated with recruiting, hiring, and training new employees. A recent Forbes article says that finding the right executive to fill a spot in your leadership team can take anywhere from four months to a year, on average. Developing internal candidates for key positions can avoid this costly recruiting process. And pulling future leaders internally ensures a smoother transition.

Succession planning can be used as a recruiting tool. Hiring managers can speak to the existing career pathways and the rate at which people are promoted from within. According to a Pew Research study, outside of higher wages, limited opportunity was a top reason people left their jobs. Succession planning also improves company culture when employees see others getting promoted from within.

Enhance Performance
Succession planning can improve organizational performance by ensuring the right people are in the right roles. Employees who are well-prepared for their positions are more likely to perform well and contribute to the success of the organization.

Creating and implementing a succession plan isn’t a “kick out of the door” or a command to leave. It’s an essential strategy for organizations to ensure your company’s long-term success. It helps mitigate risks, retain top talent, support organizational growth, reduce costs, and enhance performance. By investing in succession planning, leaders can build a strong and sustainable future for themselves and their employees.

Liddell Consulting Group can help if you want to improve the performance of your current (and future) leadership team and want to talk about succession planning. Our leadership team performance initiatives enable you to find new opportunities for success today as well as effectively and practically plan for tomorrow. Contact us to learn more.