Finding a successor for a critical role has been the focus since generations of organized governance across longitudes of time. Stories of succession have been reaching us since dynastic succession of empires until the recent public debate on who would succeed Rahul Dravid as Head Coach of Indian Cricket team. That someone needs to be brought in when the existing role holder vacates is well recognized by leaders and board of most organizations. Yet, succession planning still appears to be a struggle all around the organized world. Executive succession planning especially, is no different. Though, it has become a buzz word in almost every board, there seems to be mystery around how effective it is or how to go about it effectively.

Understanding Succession Planning

Succession planning is about risk mitigation. The risk here is something that the organization can barely afford to ignore-the talent risk. Executive succession planning may be defined as awareness, recognition and forecasting of talent separation events for critical roles of the organization and implementing preventive mitigating steps to ensure that such talent separation does not interrupt business performance. The principle that companies are ‘going concern’ philosophically sustains the business beyond a foreseeable future. However, to remain on the going continuum philosophically, companies need to be seen and run as organizations that excel operationally.

Benefits of Succession Planning

Organization switch do not have a dedicated process of succession planning seem to be governed more by adhocism than by a professionally planned approach, particularly so if it is in the domine of talent management. Succession planning is about making the organization ready with a future pipeline of successors of all critical roles to avoid any talent gap in the event of a sudden talent separation. This is an established robust process of identifying and developing talent who possess the required skills, knowledge, and attitudinal dimensions to take up the roles whenever the situation demands. Any robust succession planning process is aligned to the organizations strategic business goals. The organization thus continuously focuses upon institutional capacity building by individual capability building. The focus is not only on the headcount of who succeeds whom, but also on what competencies currently exist and what competencies would be required for a role, in future. When such a succession planning process in organizations are regularly assessed in terms of the organization’s longtime strategic goals, the succession planning becomes more effective.

The biggest benefit of succession planning is the organization itself. Succession planning prevents drainage of institutional knowledge facilitates and promotes internal leadership development, resulting in capability building and thus mitigates risks by way of sudden talent lose.

Methods of Succession Planning

Through a scientific and systematic method of assessing the current talent bank and developing potential future leaders on the competency gaps organizations can ensure that they remain on a sustainable path of talent management, making the organization immune to dynamics to ever-uncertain talent environment in business. However, worldly realities are different. At a very broad level, organizations can be categorized as Family Owned -Family Run and Family Owned-Professionally run. For most family -owned businesses key successors at critical roles are family members, typically, the son or a daughter irrespective of the competencies. In such cases, the succession plan follows the unquestionable principle of heirship and descendants’ inheritance. This is mostly seen in financial operations of family businesses. Over 28% of leaders in finance department of companies with revenues more than 10 billion says that their organization do not have formal succession planning process for CFOs (Deloitte report, 2024). Nonetheless, some family-owned businesses chose to be professionally run and they, even for top-level critical roles adopt the process of succession planning.

A comprehensive succession planning process consists of the following steps:

1. Identifying Key Positions: Determine which roles are crucial for organizational success and continuity.
2. Assessing Job Requirements: Understand the skills, experience, and attributes needed for each key role.
3. Identifying Potential Successors: Recognize employees with the skills, knowledge, and potential to fill these key positions. Assessment Centres are a great way to do the same.
4. Building Competencies: Develop the necessary skills and competencies in potential successors to prepare them for future roles. A robust leadership development program helps in building competencies.
5. Evaluating Progress: Regularly assess the effectiveness of the succession planning process and make adjustments as needed to ensure readiness and alignment with organizational goals.

Most organizations can mitigate risks by identifying and developing a pipeline of talented leaders and key employees. This will not only keep the business running and keep employees engaged and loyal, it will also drive long-term organizational success even if challenges exist. However, it is noteworthy that, organizations that prioritize succession planning and use professionals’ expertise are better prepared to navigate change. They are also able to adapt to market demands better and thrive in a competitive business world.

With strong frameworks and a history of successful past work, GrowthSqapes is best suited to be your partner in succession planning.

This blog has been written by Satyakki Bhattacharjee, Managing Partner in GrowthSqapes.