Graham Oates, Chief Executive of Norrie Johnston Recruitment (NJR), the executive search and interim management agency, explains why succession planning is so important and offers his advice on getting it right.
It can be challenging when a senior team member suddenly leaves a business and, if the employee has been performing a role for some time, the impacts have the potential to be devastating. It is times like these when having a strong succession plan is absolutely vital to ensure the impact on the business, the rest of the team, your clients and other stakeholders, is minimal.
However, our research shows that as many as 46% of UK businesses don’t have a good succession plan in place and, of those that do, most are incomplete. In fact, the study, which was carried out among 127 senior directors in UK companies, found that even those who have considered succession plans overlook some roles entirely. For instance, only 19% of plans consider the chairman, 20% IT director, 33% marketing director and 35% HR director.
But what does a good succession plan entail?
Create A Succession Plan That Doesn’t Operate in Isolation
A strong succession plan is always supported by a comprehensive training and development strategy. If your strategy is all about identifying current senior managers who have the potential to fill top positions should a vacancy arise, then it makes sense to also evaluate the senior managers’ roles, to see who below them might fill their shoes, should they be promoted. Using these insights, businesses can then ensure they are providing the additional training and mentoring required to develop these employees in preparation.
This stage of planning may also highlight potential gaps within the team, giving businesses the insights required to develop a recruitment strategy to plug these holes. Succession planning, leadership development and a recruitment strategy are all components of workable succession plan.
I would also advise considering the scope of the plan. It can be tempting to focus your succession plan on the most senior roles within your business – CEO, COOs, CFO etc. However, by doing this you risk overlooking great talent that may be sitting within the lower ranks. In order to be as effective as possible, a succession plan should have a long-term perspective, identifying who could fill gaps now, in a year or even in five years’ time. This process will also prompt you to think about the training that they will need and the gaps these more junior members will leave within the team.
In addition to going deep, it is also important to be forward-thinking and flexible when it comes to your succession plan. The skills, knowledge and experience required for a role may change as the company evolves and grows, requiring a different type of person to fill the role. The additional talents and perspective of the person leaving or joining will impact on the team’s dynamics and will potentially change the requirements for other roles. This all needs to be factored in.
Don’t Rule Out External Hiring
Flexibility is also needed when considering the internal versus external hire debate. Whilst there is a lot of merit in developing your internal talent to take on top roles, it is not always the ideal solution. If a senior member of the team leaves before the next generation is ready, or the company is heading in a new direction or facing a specific challenge, a new hire could be a better strategy. Another challenge with promoting internal members of the team is that it can be difficult for staff to accept someone who was once a colleague as an authority figure within the business. External hiring ensures these internal issues are avoided and can also provide a valuable opportunity to refresh the leadership pool with new thoughts, ideas and experiences. For these reasons, some external hiring may not just be inevitable, but beneficial.
Companies should also be open to the idea of hiring interim staff to plug gaps as part of their succession strategy. An interim manager can provide a fantastic solution if an internal candidate isn’t quite ready to step into the role or if the business is facing a one-off challenge that requires specific expertise.
Revisit Your Succession Plan Regularly
Finally, a succession plan cannot be a one-off exercise that is forgotten about afterwards. A successful plan is one that is dynamic and evolving and must have input and buy in from all members of the senior team. They should be involved; indeed, they should be able to name their potential successors and support their development.