“Thou shalt complete a succession plan for the organization,” is a typical command from a Board of Directors to its CEO and management team.   No surprise, it’s very much part of the Board’s job to ensure that the organization continues to have able leadership, particularly in the event of unplanned losses of key staff.  

Despite a good rationale for succession planning, leaders and managers often wonder if the plan is really just the first step in his or her imminent departure.  Attitude like that can slow succession planning to a crawl. 

But a succession plan isn’t about getting rid of people.  It’s about being prepared when both foreseen and unforeseen change visits management or the workforce in general. It’s about management due diligence to ensure the organization can continue functioning at a high level, despite changes in key staff.

A  good succession plan gives the organization a road map around potential pot holes, or even sink holes, that could emerge if a key leader, technical expert, or knowledgeable professional leaves.   For example, if your CEO departs, winging it in choosing his or her replacement could cost shareholders billions of dollars in lost value.  That’s some sink hole.

In fact, I would argue that the legacy of a CEO is determined almost as much by the organization he or she leaves behind, as what was accomplished during the CEO’s watch.  An organization that continues to excel after the departure of a CEO or other key players, means that thoughtful planning and development has gone into ensuring that capable successors have been developed and promoted.

The loss of a visionary leader can have significant repercussions if there isn’t a cogent plan to replace him or her in both the short and longer term.  It may have been unavoidable given his visionary image, but the value of Apple computer stock shrank more than $100 in the year or so after the death of Steve Jobs.   This, despite the assurances that the company had more new products in the pipeline at the time of Job’s death.

All of this notwithstanding, there is good news about putting a succession plan together.   It doesn’t need to be complex or costly to work.  Here are some suggestions to get it underway:

Keep it simple

You can pay a lot for a succession planning model that only a large consulting firm has the horses to figure out.   And you can keep paying a lot each time you want to update your succession plan.  Or you can develop your own model (with external help as needed) and embed it in the management process so that the plan is regularly reviewed and updated.

Integrate succession planning with annual reviews and personal development plans

Performance reviews are natural inputs to both succession and personal development plans, so why not make them part of the same process?  That way, personal development plans get aligned with what’s called for in the succession plan, while performance reviews act as a reality check for succession plans on an annual basis.

Automate

I’ve seen too many succession and performance management plans that are little more than a paper chase.  Not only is it cumbersome, but updating it can be a headache, so it’s frequently incomplete.  Why not a simple spreadsheet, pre-populated with candidate profiles, evaluation factors (competencies, performance indicators)?  It can capture both quantitative and qualitative assessments of each candidate – all without taking too much of a manager’s time.  Best of all, evaluations can be compiled and analyzed, when it’s an online process.   It allows for standardized evaluations based on organizational competencies and performance factors.   And it’s an easy way to demonstrate that proper due diligence is being applied to succession planning, should the Board want to know. 

Use both quantitative and qualitative evaluations

I don’t believe you can devise a scoring system that will reliably identify the right succession choices by itself.  There are too many intangibles that go into the decision, ones that a good leader has embedded in his or her judgment.  However, a scoring system based on competencies, or other standard metrics allows a numeric value to be assigned to some evaluative factors, including competencies.   This, in turn, can provide a helpful initial indication of who the top candidates are to consider qualitatively and in more depth.  In fact, each competency or evaluative factor can also be weighted, so that attributes which are more important to a position figure more prominently in the evaluation.  Leaders then use qualitative evaluations, the “intangibles”, about a candidate to consider succession positions. 

Quantitative evaluations can also support the case to undertake an external search, when internal candidates have low scores in relation to a succession position requirements. 

Don’t waste executive time

I’ve encountered succession planning that is a time-wasting up-close-and-personal bull session for both middle managers and senior executives, facilitated by expensive consulting firms.  Rather than tying up all of that salary in real-time meetings, consider using an online system that allows evaluations of candidates to be completed off-line in virtual time, then reviewed and approved by supervisors one and two levels up.   Based on the evaluations put forward, there can still be a real time discussion between the evaluator and his or her superior(s) when it’s needed.   

Where appropriate however, the CEO may want to convene a ‘succession panel’ from his or her management team (include HR) to verify succession planning evaluations and choices, and to ensure the process moves along.

Review at least two levels removed

One of the human biases that can creep into succession evaluations come from managers who may inadvertently deflate their evaluations of possible successors, in order to create a safety zone around his or her job.  This doesn’t happen when managers are confident in their roles and looking upward in their own careers.  To counter this issue, evaluations and selections of successors should be reviewed at least one level removed from the candidate, and preferably, also at two levels removed.   A more senior review also allows a wider perspective on the organization’s talent needs in the longer term.    

Cast a wide net

 Don’t assume that a successor to any given position must also work in that unit or department.  As organizations succession plan at higher levels, there is a greater need to ensure cross-functional experience for those moving into general management roles, perhaps heading two or three distinct functions in a division.  It’s important to remember that high-performing managers have experience and judgment that can travel well from, say, finance, to production management, or possibly to a sales and marketing role that helps season a future leader.   

Know when to look outside

A good succession planning process, applied annually, and linked to such factors as performance management and personal development plans, can go a long way to help an organization retain, develop and promote its future leadership from within.   But you simply can’t plan enough for every contingency that could remove an incumbent from a key position, without a successor identified and fully developed. There is too much competition from other employers for top talent, and the best people aren’t afraid to change employers, or even careers, when least expected. 

It’s important to clearly identify positions where the developmental curve is too long or steep for a viable successor candidate to be identified internally.  For those scenarios, have a game plan to address the gap in the near term (secondments, temps, consultants), to allow functionality while a formal search is underway.    

You should also consider conducting an external search as an added dimension for senior level positions, regardless if you have a good internal candidate.  That way, you benchmark your succession choice with the market place to verify that they have the right stuff.   Moreover, you may come up with an external candidate that will be able take the organization further, or perhaps be ideal in another role.

Finally, keep it current

Revisit your succession plan regularly, not only to make sure current succession candidates progress is captured, but also to add new rising stars into the mix.   A lot can happen, even in the course of one year, so I recommend a review and update of the succession plan annually, if possible.   It won’t be hard if you’ve streamlined the process, put it online, and embedded it with the performance management and developmental planning process.