Succession planning: The competitive edge
With the rise of Amazon and other internet giants, most businesses are now facing global competition – with hundreds of thousands of other businesses targeting your customer base from every part of the planet. To retain their competitive edge, businesses have to become better in finding and retaining the right people. CEOs have long been worrying about finding talent with the right skills and attitude, but retaining talent has become an increasingly bigger challenge. As employee turnover keeps rising, planning for the succession of key people.
Most organisations, large and small, review headcount as part of their annual budgeting process. But how many actually consider succession planning key people? In my experience, those that do concentrate on the leaders in the business assume that the 2ic (second in command) will naturally take the place of the Chief Executive. This risks overlooking the key business needs.
Yet, despite the dominant narratives around leadership, leaders are often interchangeable. What is more important is to identify the key roles within the business that require rare specialist skills and are most difficult to replace. If a succession plan concentrates on these people the whole business is more likely to have the required resilience if someone leaves unexpectedly. Here are three basic steps to make sure that you are getting succession planning right:
1) First, you need to define the job role in detail, and then pair that with a clear description of the skills and attributes that are required in order to fulfill that role.
2) Once you’ve identified possible key successors, the next step is to look at any skill gaps they might have and put in place a clear plan to ensure that these gaps are filled. Have regular sessions with potential successors so they understand the complexity of the role, and even give them the opportunity to “job swap” for a period. This will ensure that they know what it’s like to walk in your shoes and will help validate them as a potential candidate.
3) Your goal is then to upskill as many people as possible, which reduces dependency on any single individual. Make sure your key people are versatile by promoting multi-dimensional personal development plans, broader than the post they are currently occupying. Providing the opportunities for development outside a current role comes with risk, but is worth taking. You will be building a workforce that is adaptable for the future, and enables growth and diversity outside of your current capabilities. With the pace of change in some sectors moving at alarming speed, you will need an adaptable workforce to remain competitive.
Ultimately, succession planning shouldn’t be just about replicating what you already do, but should look at possibilities for how things might be improved. The learning here is to allow space in the business for people to develop and not be afraid that by creating more qualified employees you run the risk of losing key people or rising stars. True, some will leave and use that development to get jobs elsewhere, but those that do stay will be more valuable assets to your business in the longer term, and provide you with a future that goes beyond your current capabilities. And who doesn’t want that?
In an uncertain world where your services are easy to find and new suppliers easy to come by, you can’t afford to rest on your laurels. Developing your people is the best way to plan for succession, create resilience in your organisation and improve the quality of your business.
Jason Watkins, CEO, Railston & Company Ltd and Entrepreneur-in-Residence at Nottingham University Business School