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 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.
Why you need a succession plan
To stay relevant in your market, you must prepare your current and future leaders for their roles.
It’s not the business that feeds the success of the organization, but rather the people who provide exceptional service and generate new ideas. The right leaders make a measurable difference, add to the future stability of your company and make it ready for change and growth.
Watch out for these succession planning problems
A good succession plan is integral to your overall business strategy. Make sure your business is ready by having the right people in place. Identify your organization’s key leadership positions and find two or three successors for those roles.
But beware of succession planning problems. Here are six:
1. Going with your gut and ignoring the data
Your life experiences help form your attitudes and beliefs and impact your decision-making on everything from the cereal you eat for breakfast to the way you lead a team.
There is a link between your unconscious thoughts and behavior, and the actions you take have a business impact.
Let’s imagine you have two highly qualified candidates for an executive leadership position. All things being relatively equal, you choose the one with an advanced degree from your alma mater without reviewing the data.
What if you removed the names, called them candidate “A” and candidate “B” and allowed a panel of leaders to review relevant details such as:
- Performance scores
- Tenure in supervisory or leadership position
- Number of projects completed
- Engagement survey scores
- Voluntary turnovers
- Number of people promoted in their divisions
Would the advance-degreed candidate from your alma mater still get the position? The right candidate may not be the candidate you would choose based solely on your discretion
2. Focusing on past performance without considering potential
Most companies have a formal process to measure employee performance, which typically focuses on business results and core competencies, and reflects the organization’s core values.
However, performance should not be the only determining factor. When identifying your next successors, consider potential as a critical component when determining long-term success as a leader.
Look at each employee and ask yourself: What is the candidate’s ability to take on increasingly broad and complex work as the business needs change? Then help get them to that level: Provide stretch assignments outside their current responsibilities, coach them and provide a mentor who can help guide their efforts.
3. Reserving succession planning for only the C-suite
One of the biggest misconceptions about succession planning is that it applies only to C-level jobs. Let’s say that a position at the top is filled with an internal candidate. Who fills that person’s former position?
To avoid issues with succession planning, identify candidates for key positions at every level of the organization. It makes your strategy more comprehensive and, ultimately, stronger.
Keep a watch on your team and notice who gets involved and takes on project assignments outside their scope of responsibility. An employee with a keen interest in going the extra mile gives you a head start in finding the future leaders who will help navigate your company through change.
But remember: Stellar performance and leadership are two different things. It’s not out of the ordinary to confuse achievement with leadership. A member of the team does really well as an individual performer, so you promote them to a supervisor or manager position. But that doesn’t necessarily mean that person can lead.
A role in leadership is very different from a position where you are being judged solely on your performance. Leadership is about enabling others to make decisions and take ownership.
4. Taking the one-and-done approach
When your business begins to grow, things can change quickly. New products come into play, new employees are added and additional layers of leadership are needed to help ensure goals are being met.
With change being a constant, it’s safe to say what got your business to this point likely won’t take you to the next.
The organizational plan you have in place today can’t sit on a shelf. As business changes, your people will move up and out of your company, and that disruption can be overwhelming. Business goals change. So should your succession plan.
A great way to keep on top of change is to do a quarterly scan of the business landscape. This helps identify what’s happening in your industry and correlate your employees’ competencies to address those changes.
It’s never too early to ensure you are prepared to successfully deliver for the long term. Ask yourself:
- What’s being talked about in your industry?
- How are your competitors innovating?
- What is the market demanding?
- Is your business ready?
- Do you have the right leaders to meet future considerations?
5. Stopping development where the titles start
Another challenge is once an individual moves to a leadership role, training and development slow to a trickle.
Your front-line leaders are mission-critical to executing on daily business operations, while at the same time providing oversight and direction to other contributors on the team.
However, if this is their first promotion, these new leaders are typically inexperienced in the skills required to manage and lead.
Self-awareness is the most important skill to develop when taking on a leadership role. Soft skills such as these are known as emotional intelligence, or EQ. As corporate cultures change, there’s more emphasis on these characteristics.
When we don’t develop leaders fully – including EQ – we miss the mark in defining corporate culture.
For example, if one of your company’s values is servant leadership, your employees must see that behavior in action. If you expect trust and confidence, you have to give in order to receive.
It’s what your leaders do when they think no one is watching that defines their personal leadership brand. Because someone is always watching.
6. Viewing all failure as negative
Running a business requires you to take risks. And the right risks fuel business growth. Failure is the opportunity to start over with more information under your belt.
Some of the best leadership candidates are those with a demonstrated track record of taking a risk, quickly correcting and learning from failure. Great leaders can handle adversity and motivate others to see the value in learning from failures.
As Spiderman’s Uncle Ben once said, “With great power comes great responsibility.” Those in power at your organization have the responsibility to anticipate the company’s future needs.
If you make succession planning a normal part of your business, tackling future changes and challenges will be much easier. After all, it’s the people who produce the product or deliver the service, and it’s the people who make your vision a reality.
If you’re ready to find out more about how to get your workforce ready for your future needs and avoid common succession planning problems, check out our free e-magazine: The Insperity guide to succession planning through HR.