Succession planning involves establishing a pipeline of talented individuals to fill future vacancies in key positions critical to an organisation’s strategic outcomes.
The Link Between Workforce Planning and Succession Planning
The goal of workforce planning is having the right people, across the organisation, in the right place at the right time. Succession planning is an important subset of workforce planning. Its focus is targeted specifically at having the right people at the right time in positions which are critical to the success of the business.
Both workforce planning and succession planning are critical to the health and sustainability of any organisation. At any given time, an organisation should be engaging in both workforce planning and succession planning.
Succession planning sees critical positions targeted and high potential employees prepared to qualify for these targeted positions. It involves some specific considerations that should be taken into account when planning for succession to leadership and business-critical positions.
Organisations will typically undertake succession planning for the following reasons:
- Ensure business continuity of people resources
- Mitigate against potential critical business operational gaps
- Provide career pathways for existing talent within the organisation.
A succession planning program may assist in providing organisations with improved strategic viability and ongoing business sustainability by proactively addressing:
- Future leadership capability
- Business direction and continuity
- Retention of high-value talent
- Retention of organisational knowledge
- Cultural development.
To ensure consistent and effective succession, the organisation must:
- Identify critical positions, including but not limited to leadership roles
- Assess the potential for vacancies in critical positions
- Assess the readiness of current employees to assume these positions
- Develop strategies to address identified gaps, which may include developing career pathways, mentoring, formal training in leadership and supervisory skills, performance management and reward and recognition programs.
A good succession plan enables a smooth transition when filling critical positions with less likelihood of disruption to operations. By planning well in advance, you can better enable the organisation to meet future needs.
The Succession Planning Process
The process involves an integrated and systematic approach in line with current and projected business objectives. Below are the steps to follow when conducting succession planning:
- Review and refine the strategic business objectives: establish business plans for the year ahead and determine performance appraisal goals.
- Determine critical roles and assess current future leadership capabilities: conduct interviews/meetings between senior management and HR to identify significant and critical positions. Identify risk of vacancy for these positions. Assess pipeline of current employees to fill these positions in a relevant timeframe.
- Conduct systematic talent reviews: conduct the performance appraisal process to validate pipeline for critical positions. Undertake succession discussions between senior managers, line managers and HR. This may include undertaking a gap analysis. The nine-box matrix analysis and key position/person classification tools described below may be useful to use as part of these discussions.
- Reinforce execution of development plans: review, finalise and endorse succession plans taking into account outcomes of performance appraisal, development process and management assessment of relevant individuals.
- Monitor progress against success measures and adjust where necessary: undertake regular measurement, analysis and reporting to monitor succession plans. Ideally succession planning should be updated on an annual basis and adjustments made as needed.
Tools Utilised in Succession Planning
Each organisation will have a unique set of critical positions based on their business strategy and talent pool. But there are some common tools that can be applied during the succession planning process.
A) 9-Box Grid Analysis Tool
The 9-box grid is a matrix tool that is used to assess individual employee performance and potential. You can assign each employee to one of the boxes based upon their performance and potential assessment. The results can be used to identify the pool of talent for a critical position, and identify opportunities or gaps that need to be addressed to strengthen the pipeline
B) Key Position and Person Classification Tool
A second tool that is commonly applied during succession planning is the Key Position and Person Classification matrix. It helps you to classify positions by assessing the risk related to the current incumbent and pipeline.
Positions that are classified as High Risk will require immediate action to ensure continuity and minimise risk of impact to critical business operations.
When preparing succession plans for your organisation, it is important to keep in mind the following:
- Make it attainable and realistic in the context of the organisation’s maturity and strategy
- Set measurable milestones and realistic timeframes
- Identify the specific actions/interventions needed and assign responsibility to appropriate parties – this may not be just HR
- Build in time to review and adjust the plan regularly – at a minimum you should revisit succession plans on an annual basis but might also need to review based on changes to business strategy, new employees joining the organisation or unexpected terminations.
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Updated February 2022