If you’re a business owner, partner, or senior executive, you know that having a succession plan is a great idea to plan for the unknown and the future. You may have even developed a succession plan, or started, with the best intentions. There are several parts to a solid business succession plan: 1) people transitions, 2) ownership transitions, and 3) financial transitions. Today we’re focusing on the people transitions of succession planning.

If you’ve used a template to map your high potential leaders, maybe you’re on the way to creating a succession plan. What’s the problem? While every business needs a succession plan, and 86% of leaders acknowledge that it’s urgent to have one, only 14% believe they do it well (Deloitte, 2014). Why? There are several reasons, but the biggest is that most plans are not owned by a specific role and are not people centric. Templates perseverate this gap with a process vs. people focus. It’s time to move to a simpler, better future for your succession plans.

Get Started

The first step in developing an effective succession plan is to evaluate your organizational structure now, and into the future. Take some quiet time and consider the needs of the organization in the absence of current leadership roles. Likely, the roles you have now may not be the ones you need in a succession plan. Rather, consider your organization’s purpose, vision, and strategic plan. What are the needs of your customers and stakeholders into the future? What differences are in the short-term versus long-term? Take a long-term view, and identify the structure, roles and functions that will be needed. Capture a beginning view of the structure, roles and skill sets needed.

Set Key Roles

If you’re the owner, CEO or managing partner for the business, the job of getting a succession plan in place lands on your shoulders. As you define the organizational structure and roles, you may begin to consider who would fill those roles, either internally or externally. First identify the skills, knowledge and critical behaviors of each role using a data-driven job assessment tool. Regardless of the position, this reduces inherent bias in selection and function and keeps the focus on the future needs. Ensure that these roles support the strategic direction needed and complement one another in a balanced view. If you have others as partners or key executive leads, engage them in considering the structure and key roles needed as well, for better results!  

Select Key Talent

If you’ve created a data-driven job assessment tool to define the traits and behaviors of each role, now the process gets easier. You can use a data-driven psychometric behavioral assessment to identify the best match natural wiring of candidates to the requirements of the intended role. If you couple a cognitive assessment of the candidate’s ability to learn and grow into the full scope, you get even a clearer picture of capability. Evaluate the internal candidates that you believe to be a best fit based upon their past performance in like roles and see if there’s a match for the future. If the candidate match to the role is strong, then seriously consider a conversation with the person to explore succession interest and fit. Often, a conversation with a high potential or current leader about succession may help to retain key talent and build a strong workforce culture for the future. If the person is not a fit, you know that now, and can save valuable time and money in planning to develop an individual that will not be a great match. Continue this process until your key roles are identified, or you’ve identified roles that you’ll need to search externally.

Develop Key Talent

Now that you’ve identified what you need, and who will best fill it, it’s time to develop the skills and abilities of the future leaders over time. Our recommendation is to develop a learning and development plan for each leader that has specific outcomes tied to succession skills, now that you’ve clearly defined them. Work with the individual in challenge assignments, formal education or training, and mentoring, to develop experience and confidence in essential skills. Give them room to explore and grow to build capabilities for their future support. If there are short-term needs during a vacation coverage or illness, can you give the person a trial run with support as needed? Soon, there will be a clear succession plan that will help the organization to achieve the strategic future intended.

Review It Regularly

Despite the best laid succession plans, there should be a review at least annually to ensure that the persons are still in the right intended seats; the development plan is on track; and new role changes haven’t emerged. The good news is that this review process is generally quick and focused, and your plan easily can weather some periodic tweaks as needed. In addition, each time that a new strategic plan is established, this plan becomes part of the workforce plan, to position the organization for success into the future.

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The Power of Respect​

3. Does your compensation system reward high performers? Whether we're welcoming millennials, baby boomers, or everyone in between, people value those who respect and value them. There are two essential factors within evidence of respect - a fair, market-based compensation system, and recognition for exceptional work. If your compensation system isn't comparable to your regional market, you'll continue to lose your best talent based on basic value economics. If your performance management system rewards everyone for showing up and meeting the standards, then your high achievers will quickly become disenfranchised. They want a chance to excel, and reflect exceptional value. If you don't provide that opportunity for recognition, your competition will. Simple. Know your numbers, and make the numbers not the issue. Another key factor for employee and leader retention is recognition, and the opportunity to grow. Do you regularly recognize high levels of performance? How do you do it? Is everyone eligible? Is the recognition relative to the effort required or necessary, or is it unattainable? If you don't have a system of recognition, is it a common practice of your leaders? If not, can you make some changes? A strong relationship to an immediate supervisor can help employees feel so valued and respected that they would not think of leaving. That's your cultural goal. 

Now that you've recognized that there are things that you can do to make a change, and retain your talent, where do you start? Finding that purple squirrel is really about establishing an amazing culture where you grow them from within. While every company's needs are unique, here are some general recommendations to get started: ​

​1. Start with a current-state evaluation - an overall organizational evaluation is quick, low-cost, and helps you develop the action plan that is best suited to your company and workforce. This is a very sound investment for faster planning, intervention, and results. This can be done by a stakeholder survey, or facilitated focus groups. 

​2. Conduct a workforce engagement survey - an unbiased and third-party survey helps to ensure the workforce of anonymity, which encourages feedback. Get statistically significant results with a nationally benchmarked email survey and follow-up process. Knowing where your baseline is creates meaningful improvement.

​3. Evaluate how your leaders listen and engage - Two-way communication mechanisms are essential in developing a healthy workplace culture. An internal evaluation of your different types of listening mechanisms and their effectiveness will likely identify significant gaps and opportunity areas. We have a great assessment tool for this. 

​4. Evaluate and optimize your work processes - if you've not identified your key work processes, or mapped them for efficiency optimization, there is likely 30% waste in your work processes (industry average). Removing the waste involves accurately identifying your key work processes, and then mapping and tweaking them for efficiency benefits.

​5. Evaluate your leader and workforce compensation system - most HR leaders have a mechanism of ensuring market-based compensation. We also have a resource to determine leadership and C-suite compensation, benchmarked by region, industry, and role, through a national compensation benchmarking firm. 

​6. Evaluate your reward and recognition system - when you answer the questions about how high performance is recognized, insight may be realized of areas of need. Your workforce likely wants a fair and competitive compensation system and an opportunity to develop career skills for the future. Keep your eyes and actions on this to keep them. 

​If you know that you, or your team, need help with any of the above aspects, let's connect. Our passion is to help every business to keep their talent, in order to achieve the best results and organizational performance into the future. We've delivered these solutions to some of the top organizations in the nation. We'd love to help you too.

​Your Success is Our success.