A practice that is used to ensure business continuity and improve business responsiveness, succession planning focuses on key leadership positions that have a significant impact on the company and its direction, performance and success. Authors tend to focus on succession planning as a process, on the methodology and even on the systems and software that are used. But all of these approaches completely miss the point of succession planning: continuity and responsiveness.
Succession planning at its root is a business risk management tool. The fact that its nature is risk management is what fostered its requirement by the Division of Corporation Finance and stock exchanges under the U.S. Securities and Exchange Commission. It’s up to every company to decide what constitutes “key” and “significant impact.” It is important to spend the time defining the thresholds, as this will generate the volume of work that will need to be done.
The instant a position becomes vacant, the company loses momentum and progress. The longer the gap, the greater the risk of a loss of performance. By conducting succession planning, the company gives proactive thought to position-gap scenarios and what their plan of action might be. In the realm of strategy, scenario planning allows a company to anticipate market changes and potential responses. Similarly, succession planning allows a company to anticipate talent-market changes and potential responses.
Most (though not all) succession planning approaches fall short of providing companies with an effective scenario plan for talent. Most succession planning approaches are really what’s called “position planning.” In position planning, one identifies potential candidates for a position, assuming that the job doesn’t change. Almost all current human capital management (HCM) systems that have a succession module use this position planning approach instead of a scenario planning approach.
This is why they’re not used when a position becomes vacant. When was the last time a key position in your organization went vacant, and the leadership team said, “We need exactly the same thing again! Find me a duplicate of so-and-so”?
There are three key steps leaders can take to see more value from their succession planning:
1. Focus on the few. Work with leadership to identify a manageable number of key positions that are critical to business performance. This allows you to go deeper into scenarios and potential talent pools for those scenarios. Quality plans get used.
2. Work with your leadership team to envision alternative business and organizational scenarios when a position goes vacant. When a position is vacated, people will have other ideas about what to do. Get those ideas on paper, and then develop talent pools against the most likely scenarios.
3. For shallow internal benches, work the external network at the same time. Every member of the leadership team should be aware of shallow benches, and everyone should be networking to discover new external sources. These potential sources can be proactively engaged, too. You might be surprised how many people would be flattered to be considered. I’ve had remarkable success involving external bench candidates in focus groups and advisory panels. Doing so allows the company to get to know potential talent long before a need opens up.
Now, for those pesky systems that only allow you to create a one-for-one position plan:
1. One probable scenario is a replacement, so completing the one-for-one plan is useful, and it’s always the easiest place to start. Do it — capture the talent bench.
2. Many HCM systems allow attachments. You may be able to create alternative scenarios externally and attach them to the position being planned. Then you may be able to build deeper benches and put additional language in the development plans about which scenarios apply. Some systems allow you to make these notes visible only to planners, HR personnel and/or management.
If your succession plans provide a baseline for business continuity and document envisioned alternative scenarios, they become a valuable tool. Leadership will use them as a first point of reference when responding to sudden position gaps. Ultimately, the aim of succession planning is to close the gap as quickly as possible while moving the business forward in a productive manner.
