Succession planning: What needs to change?

Succession management is one of the core processes in running a successful business and is essential to executing strategy and sustaining business performance over the longer-term.

When done well, it can lead to longer manager tenure, increased employee satisfaction and reduced turnover. However, many organizations still doubt the necessity of what can be perceived as an outdated technique and interest in succession management has declined in recent years.

Often, organizations either don’t do succession management well, or don’t do it all.Often, organizations either don’t do succession management well, or don’t do it all.

This lackluster view of succession management is often based on outdated assumptions that succession is a continuity process focused only on senior leadership roles, involving opaque decisions and with identified leadership successors being put on a rigid career development path.

Below are the features of effective, future-fit succession management:

Succession management should be focused on the future

Historically, succession has focused on extending the successes of the present into the future through choosing the leadership candidates perceived as safest and the most familiar. However, this ‘more of the same’ approach can leave companies ill-equipped to deal with the future needs of the business.

Instead, companies should dynamically respond to change and focus on what is needed for future business success, considering what capabilities will be required over both the medium and long term to drive business success.Instead, companies should dynamically respond to change and focus on what is needed for future business success, considering what capabilities will be required over both the medium and long term to drive business success.

This is particularly important against a backdrop of increasing disruption and fast paced change; for most businesses, the capabilities that have driven performance in the past will not be the same qualities that deliver success in the future.

In practice, this means that future-fit succession management must walk a tightrope between managing risk through maintaining continuity and also ensuring that businesses have the tools required to meet new challenges. This can only be achieved through a clear view of future business priorities.

Organizations also need to identify what the critical roles (i.e. those that make an outsized value contribution) will be for their business in the future, remembering that these may not necessarily be senior roles or jobs that already exist today.

For example, will your organization need to create critical roles focused on the implementation and application of new technologies such as AI?

Successors can gain experience through creative pathways

Traditionally, once leadership successors have been identified, they are often set on a rigid career path with the aim to prepare them for the future requirements of the role.

Organizations should instead focus on creative ways for successors to develop new skills without the requirement to move into a new permanent position.

Increasingly, career development will be about ‘gigs’, short-term work assignments and projects done on the side of an individual’s main role, often accessed through a talent marketplace platform.

Applied to succession management, this approach means allowing the individual to amass experiences that are complementary and accumulative, helping them to develop the breadth and depth of experiences required to run and lead an integrated business.

This may require rethinking job and work design, such as creating more elastic boundaries around existing jobs.

Opaque approaches to succession management are damaging

Many organizations have been hesitant to be transparent in their approach to succession management, highlighting concerns that a candidate may leave if they know they have been flagged for promotion, or may see flaws in the succession planning processes.

However, in the absence of transparency, people will create their own - potentially damaging - narratives. Ideally, organizations should be transparent about their succession processes and criteria, as this ensures that processes are consistent, promotes integrity and makes it easier to evidence inclusion outcomes.

The required level of transparency regarding outcomes is more nuanced and will vary between organizations, but should be a conscious decision aligned with the business’s overall culture and talent philosophy.The required level of transparency regarding outcomes is more nuanced and will vary between organizations, but should be a conscious decision aligned with the business’s overall culture and talent philosophy.

Where possible, businesses should be transparent about succession status with the relevant individual, as this helps to prevent people from being put on plans that they are either not aware of, or are not aligned with their career interests.

Succession management should be employee-centric

Traditional models of succession tend to focus on selected individuals or pools of talent who are earmarked for enhanced career support. Succession management is now increasingly democratized and less the preserve of a small number of privileged candidates.

This increases the likelihood that talent will be available when needed and also reflects broader organizational trends towards greater employee centricity and inclusive talent pipelines.

Rather than following a prescribed career ladder, these employee-centric approaches treat individuals as authorities on themselves, with agency to make informed choices around career progression and mobility.Rather than following a prescribed career ladder, these employee-centric approaches treat individuals as authorities on themselves, with agency to make informed choices around career progression and mobility.

For example, our research identified one organization with nearly 30,000 employees who have recently implemented a new, employee-centered succession management approach.

This includes people leaders first listening to employee aspirations, which can then be aligned with succession planning. However, these types of approaches are likely to only succeed if the organizational culture also supports the development of talent internally.

For example, a prevailing view that the ‘cream rises to the top’ can lead to complacency about the need to plan for talent development. A development culture should instead balance short-term results and longer-term development, making tough calls when required to prioritize development.

Succession management should no longer be seen as rigid, opaque or exclusionary continuity process. The dynamic and ever-evolving business environment means that there has never been a more critical time for organizations to recognize the potential of succession management as a future-focused, dynamic, transparent and participative process.

When done effectively, it's a critical component of long-term business performance.