A Practical Guide to Succession Planning

In this article: 


Why Succession Planning is Important

Succession planning is the process of identifying replacements for high-level positions and creating a strong talent pool from which you can select candidates to fill critical high-level roles within your organization. 

However, succession planning goes beyond identifying and selecting replacements. Many organizations use succession planning to:

  • Promote long-term planning by aligning upcoming strategic needs & priorities with critical skills & career experiences
  • Identify talent gaps and talent readiness 
  • Encourage growth and development by creating short- and long-term developmental opportunities
  • Mitigate business risk by aligning with compliance and business continuity needs
  • Support diversity, equity, and inclusion goals by creating a leadership pool with diverse perspectives, backgrounds, and career experiences

How to Start Succession Planning

Follow these steps to ensure you have the right people in the right positions, both now and in the future. 

Step 1: Align Business and Talent Strategy 

Ask the following questions to review your business and talent strategy to determine: 

  • How does our business strategy affect our talent strategy?
  • How will upcoming plans for growth, e.g. acquisitions, organic growth, etc. change the structure of our talent pools? 
  • What environmental or technological changes could affect our business strategy?
  • What skills, competencies, or career experiences are essential for business success? How might that change in the future?
  • How do we measure success? Which KPIs or metrics are critical to reliably measure performance?
  • What changes to our talent strategy or organization culture are needed based on our business goals? 

Step 2: Identify the Roles Included in Succession Planning

Identify the roles included in this succession planning process. 

Typically, these are executive positions, roles critical for business continuity, or roles that are especially difficult to fill. Both internal and external candidates can be identified during succession planning. 

  • Critical to revenue: There would be immediate and meaningful effects to revenue based on the quality of the individual 
  • Critical to operations: The ability to produce goods and services would meaningfully increase or decrease based on the quality of the individual 
  • Critical to risk: Your organization's exposure to risk would meaningfully increase or decrease based on the quality of the individual 
  • Critical to the team: There would be dysfunctional effects to the team without strong leadership

Step 3: Identify Nominators

Identify the leaders who will participate in the succession planning and nominate potential candidates. This typically includes executive leaders, directors, VPs, and the chief HR officer, although this can vary based on the culture and organization's size. 

Once succession plans are created, they are often shared with a board of directors as a presentation. 

Step 4: Leverage Data to Make Nominations

Leverage internal data to discuss readiness and performance, identify where data is still needed, and avoid bias in the nominations. 

This data typically includes: 

  • Talent review data
  • Performance reviews
  • Team engagement 
  • KPIs, key performance indicators 
  • Organizational metrics 
  • Key leadership competencies or skills 
  • Career experience(s)

As you create your data dashboards, review your organizational and talent strategies to identify the skills and experiences needed now, as well as those that will be critical in the future. 

Challenge those involved to avoid replicating the current leadership team, instead, look to diversify the team to be well-positioned for future success. 

Step 5: Foster Insightful Decisions

It's critical to foster psychological safety to promote honest and rich discussion among your nominators when discussing performance and growth opportunities. 

Actively solicit perspectives, promote conversations, and create safety for individuals to challenge entrenched perspectives. 

Leveraging data and broad perspectives can help you avoid biases in the succession planning process. Common biases that can cloud decision-making include: 

  • Recency Bias: Only considering performance over the last few months 
  • Similarity Bias: Looking for individuals that remind you of yourself 
  • Halo/Horns Effect: Quickly categorizing individuals as a good or bad performer, respectively, based on snap determinations

Moving Forward

Step 1: Communicate

Share the succession planning framework with executive leaders, the board of directors, or other stakeholders to highlight how your succession plan and talent strategy support your business strategy.

Gain alignment with leaders on the plan and the actions needed to support your high-potential talent in the future. 

Step 2: Leverage Insights

Traditionally, succession planning often concludes after assigning successors, but organizations can take advantage of the valuable insights gained during these discussions to create growth and development for employees. 

For high-potential candidates identified in this process, identify on-the-job learning, coaching or mentoring, or other formal programs that could help prepare them for their next role. 

Use coaching conversations to discuss the candidate's career goals and interests, creating developmental plans that transition from general to specific as opportunities arise or as succession timelines become closer. Create space for the candidate as they take on training, stretch assignments, etc. to distribute their workload and avoid burnout.  

Step 3: Source and Apply Additional Data

Use additional data to understand the employee experience for your high-potential employees, i.e. how to better engage and retain high-potential candidates in the talent pool. 

Leverage data from 1-on-1s, Feedback, Talent Reviews, Surveys, and Recognition for new insights on your employee value proposition and opportunities for building greater engagement and performance.