You receive notice that your CFO is unexpectedly leaving, effective today. The timing couldn’t be worse – your VP of Finance is set to retire next week. And then reality hits: no one else in the department understands the responsibilities, processes, and accounts associated with these roles.
Unfortunately, this isn’t a fabricated scenario. And situations like this happen all the time, especially after acquisitions (when the organizational structure isn’t redesigned) or in fast-scaling companies (which may focus more on day-to-day tasks instead of strategy).
You therefore need to invest time and resources in succession planning to help mitigate risks like these down the line. To ensure your team is aligned on decisions and strategy, ask the following three questions as a part of your succession planning process.
For a successful succession planning process, you need to consider your company’s goals. And by goals, we don’t mean quarterly OKRs or your long-term vision statement. Instead, focus on setting goals for the next one to five years and determine the people needed to make them happen.
That last task – considering your people and their skills – is the bread and butter of your succession planning process. You’ll quickly learn that you can’t achieve specific targets if you don’t have the right people. For example, a goal of increasing your marketing team by 50% doesn’t make sense if you don’t have plans to hire a recruiter. Similarly, you wouldn’t aim for a technology product release in the next year if your head engineer was planning to retire.
Therefore, when deciding if your company goals match your current workforce, consider:
Ultimately, aligning your succession planning strategies to company goals helps create an action plan for your organization and people. This action plan doesn’t just benefit your company by reducing risks; it also benefits employees by encouraging upward and lateral growth.
Imagine you had to leave your company right now and choose your successor. Who would it be? If a flurry of your projects, clients, and responsibilities flashed through your head, you’re not alone. Everyone wants to ensure the right person is taking over their role, AKA someone who is skilled as well as motivated, trustworthy, and competent.
Therefore, the evaluation phase of the succession planning process is an important one.
When it comes to choosing the right candidate, you’ll find two different approaches for internal succession: choosing by person and choosing by qualifications.
Your first option for choosing the right candidate is selecting certain people within your organization. It’s a popular succession planning strategy, especially when it comes to backfilling executive roles.
Management consultant Peter Cohan advises leaders to choose “a successor with a track record of entrepreneurial success.” And if you’re looking to “future-proof” your company, as he calls it, look to select two people – “one who has created new revenue streams and another who excels at controlling operations.”
There’s additional benefits to choosing specific people, such as your ability to:
The second succession planning strategy is looking to qualifications, not specific people, when identifying candidates. The National Institutes of Health advises that organizations should leverage positions, not people: “It is more effective and a best practice to determine which positions are best qualified to succeed another position rather than the individual people filling those positions at any given time.”
By finding competent candidates via their position, you can help:
When your employee profiles also include job descriptions, you (and they) can better understand the responsibilities and skills needed to be successful.
When someone leaves the company – intentionally or unexpectedly – critical company knowledge may also be walking out the door.
If you don’t have a succession plan in place, the best-case scenario is that you lose significant time getting your people up to speed. The worst-case scenario? You never recover those lost insights.
It’s therefore necessary to consider where your company’s knowledge lives. To keep your employees aligned and your data secure, avoid saving important documents on spreadsheets or saving on hard drives. Instead, store your company knowledge in a centralized location, like a people analytics platform or a shared drive, so the right people always have up-to-date information at their fingertips.
For example, let’s say you’ve named Lisa as the new VP of People. She needs to understand the growth of the company over the past six years so she can make data-based decisions moving forward. Luckily, your company’s information isn’t buried among different drafts on her predecessor’s desktop. Since you’ve invested in a people analytics platform, she can quickly visualize the people data she needs, which results in less time asking for help and more time gaining insights.
If you want to quickly visualize the progress you’ve made, look no further than an org chart with time travel capabilities. With it, you can quickly identify the growth of your company and teams.
If you haven’t started creating a succession plan, take this as your sign to set up a meeting with your executive team. If you already have one, it’s time to review it with the above three questions in mind.
When you consider your company’s goals, the right successors, and the way you store company knowledge, you set the stage for a stronger succession plan to help your team navigate the predictable (or unpredictable) situations that you will undoubtedly face.
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