Succession Planning is the systematic process by which organizations ensure orderly succession to executive and managerial positions by anticipating personnel changes in advance and ensuring that the right types of people are available.
Management Consultants are more frequently being engaged to carry out the Succession Planning process. In essence, Succession Planning is a segment of personnel planning, and should ideally be the responsibility of personnel departments. However, the personnel function is all to often regarded by management as a records office, and in such cases plays no part in management decision-making, nor does it tend to make a worthwhile contribution to the achievement of corporate objectives. Also, personnel departments are sometimes staffed by long-term employees who may lack the objectivity required to do justice to the Succession Planning process. They may select a potential successor based on popularity rather than competence.
Basically, the process begins by extending the organizational requirements into the future, working from the long-range plan. Three organization charts are produced: the first reflects the current position, while the second represents the final year of the planning cycle: the third chart depicts the organization at some convenient mid-point.
Next, a management succession chart is compiled, recording the retiring date or probable promotion date of each manager and the names of one or two potential successors. It also shows the ultimate level each person is likely to achieve.
A succession chart which shows too too many redily promotable people with too low a probability of movement into higher management positions, may point to a problem area. Capable, ambitious managers may become restless and leave if opportunities for promotion are low.
The chart will also reveal gaps in succession planning. An assessment then has to be made of those gaps which must be filled with a potential successor, and those where the cost of doing so would exceed the benefits gained. Alternative succession strategies open to a company are recruitment, interdepartmental transfers, and the training and personal development of key people.
In generating a Succession Plan, an attempt is made to forecast the different types of skills that are expected to be needed in the future to ensure that new managers possess the necessary attributes. The manager of today has to have much more mathematical ability than the manager of fifteen years ago. A quality of management of the future is flexibility of outlook, and the ability to retrain where necessary.
Coincidentally, the appraisal/analysis process incorporated in Succession Planning tends to uncover other problems in an organization which, by addressing early have resulted in lowered production/operating costs, raised productivity, a refocusing of the marketing effort and generally the fine tuning of the organization so that it is better equipped to succeed, especially in a highly competitive environment.