How To Create A Succession Plan

By: Jennifer Leahy
October 17th, 2011

The departure or death of a company’s leader is chaotic at the best of times, but having a succession plan in place can help protect a business and ensure its core operations remain intact during times of transition.

A well thought-out succession plan provides a map to guide the business owner in selecting the next generation of leadership. Creating such a plan is a manageable task that yields immeasurable results if and when a company faces either a planned or unexpected change in power.

Larger companies may need to establish succession committees, while smaller companies may find that one person is able to manage the process. Either way, approaching leadership transitions with a systematic plan in place can insure the process is painless and seamless. Although succession planning is most commonly utilized for the C-suite, it can be used for any key role.

The first step in creating a succession plan is to develop a success profile. It is important to identify the skills, education, and experiences that the ideal leader would bring to the organization.

According to Bob Reticker, Director of Performance Improvement with Insperity™, selecting a leader for the company in a future state is key. “Don’t focus on the job title that exists today – it may not be the same three, five, ten years down the road,” he said.

Reticker points out that the perfect successor may be nothing like the current and advises business leaders to keep an open mind.

“Think, ‘What type of leaders do we need? What skill sets do they need? What situations will they face? What traits are required?’ and use the answers to formulate a success profile of the future leader,” Reticker said.

The next step is to nominate potential leaders. In some cases, the high performers in the organization may possess the ideal traits, skills, and education to take the helm. He advises involving senior management in this discussion in order to identify possible candidates.

Reticker believes that those employees tagged as “high performers” and designated as potential future leaders should be made aware of the plans, as long as they are expected to remain with the company for the foreseeable future.

Once the list of potential candidates has been compiled, analyze each and ascertain potential deficiencies. The resulting list will indicate areas that require development.

Formulating a plan to accelerate the development of potential leaders is the next phase. Although each industry is unique, common ideas may include:

• Assignments
• Projects
• Mentorship
• Training and professional development
• Involvement in trade organization

Reticker advocates open communication about potential future roles and performance during the development process. “People need to think not about preparing someone for the organization as it exists today, but about what the organization will need in the future,” he said.

Consider Apple, Inc. Had a succession plan not been in place prior to Steve Jobs’ death, what could have happened? Consider your company. What happens when you or a key leader leaves the office unexpectedly? Is not having a succession plan a risk worth taking?

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