Should my company have a formal employee succession plan?

Employee succession planning is a process by which a company ensures that people are recruited, assessed and groomed to fill future openings in each key role within the company.

Effective succession planning involves much more than having a list of names to fill potential leadership vacancies. In fact, succession planning should be applied to all of your most critical roles, regardless of their position on the org chart.

Successfully navigating through what is an innately subjective, emotional and highly political process requires delicate stickhandling. Done right, succession planning can ensure your organization has the right bench strength for any critical positions that open due to such expected events as promotions, resignations and retirements, or the creation of new positions as you grow. This also improves your ability to deal with unexpected departures and alleviate your business risk.

Succession planning should be considered an ongoing business process. A key contributor to its success is senior management’s ownership of and engagement in key aspects of the process, including: identifying internal candidates; determining the development plans; and agreement on how the process will be conducted. Leadership needs to drive this process, whereas HR will facilitate it. Also, development opportunities, including stretch assignments, interim roles and special projects, must be closely related to the job and provided in a timely manner.

The decision about whether to inform a candidate that she is part of a succession plan is a recurring debate, and the choice often comes down to the preferences of your company culture. When managed appropriately, informing an employee that she is part of a succession plan signals that the organization is invested in the candidate’s advancement — a great motivator and a possible retention tool for your high-potential employees.

Once the candidate has been selected for succession, it is critical that a thorough transition plan be developed so that she has the benefit of a strong beginning.