Organizational chart and succession planning

5 steps to kick-start your succession plan via your org chart

An organizational chart is more than just a two-dimensional snapshot of your company’s hierarchy.

When used properly, it’s a living document that you can leverage as a powerful workforce-planning tool. It helps you make staffing decisions that spur growth, including those involved with succession planning.

Let’s explore the link between your organizational chart and succession plan.

Why you need an organizational chart

Many leaders of small and even medium-sized companies assume that since their business isn’t large, they don’t need an organizational chart.

But no matter your size, a well-designed organizational structure should be an integral part of your strategic planning. 

An effective organizational chart: 

  • Explains your employees’ workflow and responsibilities
  • Guides employee tasks, interactions and reporting
  • Helps employees to understand where they need to go for support or answers for specific issues

And being able to visualize your HR data from a high-level helps ensure you grow your company sustainably in a way that supports your business goals (while avoiding becoming a bloated company).

Why you need a succession plan

The most constant thing about business is change – and no one is immune. Ensuring your business is ready for the inevitable is essential to its growth and longevity.

Part of readying your business for change is knowing who’ll lead your company into the next generation.

You need a succession plan.

It should help you identify, mentor and develop high-potential employees for career-growth opportunities. While top leadership roles should be a key focus of your succession strategy, the plan should include all levels of your organization. Doing so makes your strategy more comprehensive and, ultimately, stronger.

Why your organizational chart and succession plan go hand-in-hand

Simply put, your organizational chart shows who leads and works for your company at the present time, and you can think of your succession plan as the future, hypothetical version of that same chart.

Both tools stay active and strategically relevant when you keep them up-to-date. Your organizational chart should be refreshed any time there is a staffing change. And it’s best practice to revisit your succession plan yearly.

If your company doesn’t have a formalized organizational chart, creating a succession plan will be much more difficult than it would be if you did.

If you can’t clearly see where your company is today, how can you accurately plan what you want your organizational structure to look like in the future?

Below you’ll find five steps to guide you through building a your organizational chart and succession plan strategy that will enable you to quickly curb any disruption to your business if key employees leave.

1. Assess your business needs.

You want your succession plan to be driven by your business needs – not just what your immediate needs would be if someone left your company today, but also the needs you’ll presumably have as your company grows.

Sometimes we’re clear about our ambitions for the future – for example, growing by 10 percent – but forget that people are almost always required to help us grow into our goals.

Ask yourself:

With your answers in mind, map out your current organizational structure. Then, try to predict what your company will look like in the next stages of growth.

When your succession planning process begins this way, it will be much more helpful to you if someone leaves your company.

2. Identify key roles.

With an organizational chart, you can easily look across your entire company to identify the roles most critical to your business’s productivity and performance.

To identify your most influential positions, take note of each role’s:

  • Span of control
  • Headcount supervised
  • Budget managed

Now, think ahead to the future:

  • Are any employees in your most influential roles nearing retirement?
  • How would you keep operating well in those areas should a vacancy arise for any reason?
  • What skills and qualifications are needed to fill those key roles?

If you can use your organizational chart to identify which roles are most critical to your success as a company, you can better prepare for possible departures in your succession plan.

3. See your full strength (or weakness).

A shift in power following the exit of an influential employee is a hefty challenge for any business. It’s even more taxing when you don’t have a good sense of everyone who’s on the bench.

With an organizational chart, you can more objectively consider employees you already have on the team as you develop your succession plan. This helps ensure no one is left out of the running for a future promotion or role change.

Furthermore, showing your management team the broad perspective your organizational chart provides helps them get to know your workforce as a whole, increasing visibility into your talent base. This way, they can recognize valuable employees beyond their own departments.

As you plan, consider:

  • Who do we already have who could move into a key role?
  • What skills do they already have?
  • What skills do they need to acquire in order to best fit their future role?

Create development plan to get them there. Also, be honest about what deficiencies you have. These are the roles you may need to look for outside of your organization.

And remember, succession planning isn’t just disaster recovery aimed at the uppermost levels of your company. Ideally it should include your entire workforce – especially any key roles you identified outside of your executive team.

4. Track who’s ready for promotion.

Now that you understand how your organization can evolve, you can plan for how it should evolve immediately or in the very near term.

Effective succession planning isn’t about filling in the blanks; it’s about finding somebody who has the potential to take your company to a higher level.

Who is pursuing a promotion or deserving of one?

Your organizational chart can make it easier to pinpoint employees who have the skills – or potential – to immediately assume open positions, so that you can minimize disruption should someone leave.

When you factor in things like performance ratings and salary, you get an idea of who can truly help your business take the next step.

Finding internal candidates with the help of your organizational chart can save you time and money spent on recruiting, onboarding and training outsiders.

5. See multiple future options.

You have your organizational chart, which is the now. You have your succession plan that shows how things might develop in the next two to three years.

But nothing ever goes according to plan.

That’s why it can be extremely helpful to have identified all potential employees who could fill a key role. If your first choice doesn’t pan out, your organizational chart makes it easier to pinpoint viable backups.

Having multiple options (or acknowledging that you don’t have a deep bench) can allow you to better plan for the future. If you realize you lack backups for a critical role, you’ll know to spend time developing the needed skills or creating a hiring plan to help fill those gaps at the appropriate time.

In summary

Businesses of all sizes cope with many changes over time.

Having an organizational chart and succession plan that you develop and update in unison helps you manage the evolution of your workforce in the most strategic way possible.

Ready to start planning ahead for your company’s future? Download our free magazine: The Insperity guide to succession planning.

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