Do you have a succession plan for your firm? If the research is true, probably not. According to a recent study,* two thirds of public and private companies say they don’t have a formal CEO succession plan in place. Do you need one? A lot of people don’t think so. According to an online Harris poll, 47% of respondents don’t believe a succession plan is necessary. And they would be correct – as long as they don’t care about the future viability of their organization. Given those statistics, the odds are slim that organizations have any kind of plan in place for the succession of key positions beyond those of the CEO. How would you replace your service manager, sales manager, product manager, marketing manager etc. if they left tomorrow? Most organizations would struggle and their business operations would suffer, at least for a while. It doesn’t have to be that way.
According to research cited by Ultimate Software, there are real, measurable differences in the performance between organizations that have comprehensive succession planning with those that don’t. Comprehensive succession planning goes beyond the chief executive officer or the chief financial officer. Comprehensive succession planning extends to all key positions within the organization. “This takes time,” you say. “The hassle factor and time that this would take more than offset the benefits,” you add. Consider what this research found.
- More than 90% of 18-34-year-olds say a clear succession plan would boost their level of engagement
- 94% of employers report that having a succession plan positively impacts the entire workforce
- 32% of people say they would quit if there was no room to learn, grow or advance at their job
Furthermore, this research shows that preparing high potential and high-performing employees for progression in the organization by investing in their development, will demonstrate your commitment to them. Even if you disregard the research, you intuitively know that employees are more likely to stay with an organization that believes and invests in their future. So, why don’t more organizations do this? Perhaps they don’t know where to begin. The thing is however, it doesn’t have to be complicated. A simple approach might be accomplished with the following steps.
1. Identify the key positions in the organization that you want to succession plan for. Work with the individuals currently in these positions to identify the key strengths and behavioral traits necessary to be successful in these positions.
2. Identify the training, personality traits and on-the-job experiences that will be needed to successfully groom an individual to move into each of these key positions.
3. Identify individuals in the organization who have the potential to move up based on their current job performance and personality traits.
4. Working with the high potential individuals, invest in training previously identified to help them prepare for future responsibilities. In addition, expose them to on-the-job experiences that can help them use this training in real life situations.
There is specialized software that can help you with this task. For example, a software program by the name of UltiPro Succession Management by Ultimate Software was designed specifically for this purpose. For more information on the research as well as the software cited in this study, see the link below. How expensive is software like this? Online research shows that services from similar companies usually cost around $5-$10/employee/month for basic services, while more extensive applications cost $20-$40/employee/month. No matter how you do it, you owe it to yourself to invest in some type of succession planning for your organization’s future.