Succession planning creates an essential framework that ensures you have qualified replacements already lined up for each key position in your company. Successful succession planning provides a systematic way to make sure your business runs smoothly even if a key player is out of the game for whatever reason.
Take Steve Jobs of Apple Inc. as an example. He is the CEO and heartbeat of Apple. Unfortunately, he has a medical condition that resulted in him taking a six-month leave of absence. Because Apple had a succession plan in place, the business continued in his absence. While your company might not be as big or complex as Apple, it is important to take a lesson from Apple’s example and begin your succession planning before an emergency arises.
Elements of Succession Planning
Developing a succession plan for your business can be accomplished by the following.
1. Identify key positions
The first step in effective succession planning is to know which positions are essential to your business. Typically, these positions are leadership roles such as C-level (CEO, CFO, COO) positions, VPs, and department managers. That said, there might be key positions outside of traditional leadership roles where you should consider having a succession plan in place, as well. These employees can have highly technical skills or be individuals who have specialized knowledge that isn’t easy to replace.
2. Identify successors to key positions
Once you have identified your key positions, the next step is to look at your employee roster for candidates to potentially fill these roles. To do this you need to know what essential knowledge, skills and abilities (KSAs) are needed in the job and have an understanding of your employees’ KSAs. Look at your employee roster and narrow down your list to those who either meet the requirements or come close. Ideally, you should have a handful of candidates for each role.
Now that you have a short list of candidates, you need to know if they are interested in the possibility of being groomed for the role. I would be very careful not to promise anyone a future role but instead let them know that your goal is to identify and prepare a few candidates so you have options if and when the time comes.
3. Perform a gap analysis
Though you have created a pool of candidates who are the most qualified, they may not meet all the requirements for the job. The next step for effective succession planning is to perform a gap analysis. The role of a business owner in a gap analysis involves determining the difference between the KSAs required for the job and the KSAs the candidates currently have.
4. Create a succession game plan
Now that you know what KSAs your successor pool lacks, you need a succession game plan for how to fill in the blanks.
There are a number of different ways to get your employees trained. Some cost a lot in terms of time and money and some are free with a lot of flexibility. Deciding what route to take will depend on what you are trying to accomplish, how much time it will take, and of course, budget.
With job shadowing, a subject matter expert (SME) in your company teaches a trainee by letting them “shadow” them in their job. The SME instructs the trainee about the job, let’s them see what they do and explains how they make decisions. The trainee may even perform some of the SME’s duties with the SME’s direct oversight. For example, your director of operations may be the successor for the COO position but is light in accounting knowledge. You may have this director of operations job shadow the CFO to gain a better understanding of the financials and accounting in general.
The purpose of job shadowing is to set up a mentoring relationship for the trainee in a particular area and give them a better understanding of the subject they shadowed.
Special projects or stretch assignments
Special projects or stretch assignments are used to give someone on-the-job training. It allows someone to stretch their current abilities so that they gain experience in an area where they have no experience or are weak. This is usually done with oversight and mentoring. For example, if you have a manager who needs global experience in order to be qualified for the next promotion you may have them participate in a management abroad program so they can pick up this experience and an appreciation for the challenges of global issues.
Formal training varies a great deal but can include university programs, certification programs, or maybe a seminar on a particular subject. This approach usually relies upon traditional lecture training. This can be helpful to those who require formal education like a degree or certification for their future job. The drawback is that it usually requires more time and money. An example of formal training might be requiring an M.B.A. or other Master’s degree for all the executive leaders in the company.
5. Continuous succession planning evaluation
Once you have the gaps in KSAs filled in for your successor group you will have an able and willing workforce ready to step up to fill in if needed. That said, it’s important to reassess periodically to confirm that your succession plan needs haven’t changed over time.
Succession Planning Is Time Well Spent
Effective succession planning allows your business to run smoothly, even with the unexpected, and gives you peace of mind. Having a succession plan in place is smart business.