What is Succession Planning?
Succession planning refers to the business strategy companies adopt to handover leadership roles to another employee or employee group. It ensures that businesses continue to operate smoothly and uninterruptedly after key players have left the organization. This includes preparing for a planned separation, e.g., retirement, or, on the other hand, planning for a sudden departure, e.g., for a serious health diagnosis of a key employee, or in the event of loss of life.
Succession planning does not just apply to leadership roles. It can also include staff with specialized knowledge, experience, or roles that are typically difficult to recruit for.
Risks of not having a Succession Plan in place at your Organization.
As an HR Leader or business owner, you know that your organization's success often depends on having key talent in your workforce. We are all aware of what sudden and abrupt changes can mean to an organization. Here are a few major risks associated with not having a succession strategy in place:
- Financial loss
- A drop in stock price when investors lose confidence in the new leadership team
- Key talent leaving the organization may also impact the company's ability to fulfill customer demands
- Loss of knowledge and know-how that is key to operations if not transferred to other staff
- Culture and staff engagement may decline due to the feeling of uncertainty and the power struggles that emerge when there are open key roles
- This may lead to additional staff leaving the company, especially if they feel they are not being recognized for their potential, and / or being considered for leadership roles
- Customer confidence may decline if they do not feel that their needs are being met and they are negatively impacted by issues during the transition