I often must stop myself from stating the obvious but on this occasion, I’m going to go for it: Succession Planning is all about planning for the future of the business. It often includes finding the time to “think” and the time to have critical conversations with family members and high potential colleagues. 

It’s about securing the future of the business and often requires a stoic approach –“What happens if Paul wins the lottery? “Great for him but he’s now off on a around the world trip. Who’s going to do his job and make sure that everyone gets paid?”, “What happens if Orla decides to hang up her Ops Director hat and move to Goa to become a Yoga instructor?”… Okay, so that was probably a bit too specific but hopefully you get the point. 

Succession planning is all about making sure that you have a suitable plan B. 

I spoke to our Head of Human Capital Consulting, Chris Mullan and this is what he had to say: 

“Developing your internal talent and hiring for growth potential are two sides of the same coin, they are both essential for building a resilient, future proofed business. Providing investment for internal talent isn’t just about retaining them, it’s about creating a pipeline of leaders who know your business, your culture, your strategy and processes. Plus, it’s cheaper to build your own than constantly having to go to market for new talent every time you need to fill a position. 

In saying that its equally as important to your approach to external hiring. When bringing new talent into your business, its critical to look beyond the immediate role requirements and assess candidates for the ability to take the next 1-2 (possibly 3) steps in their career path. That talent who can demonstrate not only the skills for the current role but also the potential to grow into future positions ensures that futureproofing. Not only does it save money and time associated with recruiting externally it helps create a culture of opportunity which is attractive to high calibre talent.  

Utilising both strategies helps businesses become more agile and resilient. Creating a robust talent strategy will differentiate your business from others in the market and deliver a steady stream of talent that will ensure business continuity and growth.” 

In any business, it’s crucial to have a succession plan in place. If there are no internal candidates (Plan Bs) ready and able to step into the roles of key leaders (Plan As) should they leave unexpectedly, you’ll need to look externally. Being proactive about this is far better than being reactive. 

Recently, I’ve been collaborating with several business owners to bridge the gap between their stepping back and the next generation stepping up. In all these cases, there was a significant gap that needed to be filled, often spanning 10-15 years. Unfortunately, there was no one within the businesses with the desire or readiness to take on these leadership roles, necessitating an external search. 

There’s a huge benefit to taking a proactive approach to succession planning. It means that instead of having to be reactive to the unexpected and having to make a distressed purchase-style decision on hiring, you’ll be able to take your time to ensure you have the right talent within the business, developing and growing until they are ready to take the step up. 

This proactive approach not only mitigates risks but also positions the business for long-term success. 

I recently reconnected with a client that I had dealt with a few years earlier. After 30 years working within the same organisation, they decided that the time was right for them to retire. After all, they had reached their peak in terms of what their role required and had steered the business on smashing their aggressive growth plans over the past few years – they were leaving on a high.

Surely there was someone ready to step into their shoes, I thought. But instead, the answer was, “No! That’s why I contacted you – I need you to recruit my replacement”.

After some probing, I found that most of their Senior Management had been working for the organisation for 15 years or more. This business boasts an enviable workforce stability that provided a solid foundation for growth and success throughout the years, but I couldn’t help but feel that the lack of knowledge sharing could put them in a difficult situation going forward.

Within businesses like this one, the main challenge lies in ensuring a seamless transition of leadership and maintaining a skilled workforce despite employees staying on until retirement age. This is where effective succession planning steps into the spotlight, offering a tailored solution to the peculiar needs of companies with high retention rates.

Understanding the unique landscape

Businesses with high employee retention rates have a distinct advantage in terms of stability and institutional knowledge. However, this advantage can quickly become a stumbling block if not managed strategically. The risk of knowledge gaps due to sudden retirements or unforeseen departures looms large, making the need for a comprehensive succession plan imperative.

Implementing a Culture of Growth

Promoting from within becomes more than just a hiring practice; it’s a philosophy that helps to improve your company culture. Successful businesses with high retention rates recognise that each employee is a potential future leader. To harness this potential, they invest heavily in training, mentorship, and professional development. Employees are provided with opportunities to expand their skill sets, take on new challenges, and develop leadership qualities – boosting their engagement and satisfaction within their roles.

Identifying and Nurturing Talent

A central aspect of succession planning is the identification of high-potential employees. These individuals possess not only the necessary skills but also the right attitude and mindset to step into leadership roles. Through regular performance assessments, managers can pinpoint these talents and design personalised development plans that align with the company’s long-term objectives.

Knowledge Transfer

In organisations with long-tenured employees, institutional knowledge becomes a prized asset. To ensure this wealth of experience is passed down effectively, mentorship programs are established. These initiatives facilitate the transfer of knowledge from senior employees to their younger counterparts, ensuring that valuable insights and industry wisdom are not lost when a seasoned employee retires.

Cross-Training and Skill Diversification

To counter the potential pitfalls of employees becoming overly specialised, companies with high retention rates focus on cross-training. Employees are encouraged to acquire skills beyond their immediate roles. This not only prepares them for unforeseen leadership roles but also bolsters the company’s adaptability in the evolving business landscape.

Structured Career Paths

Unlike businesses with frequent turnover, where the focus might be on short-term objectives, companies with enduring employees map out structured career paths. Employees understand the trajectory of their growth within the organisation, fostering a sense of purpose and commitment. This approach also aids in keeping employees engaged and motivated over the long haul.

Flexibility in Leadership Transition

Succession planning in high-retention environments necessitates flexibility. Employees might not be looking to ascend the corporate ladder at the same pace as in other organisations. Therefore, leadership transitions should be adapted to the individual’s readiness and preferences. Sometimes, this might mean overlapping roles or adopting co-leadership models.

Adapting to Change

Change is inevitable, even in businesses with high retention rates. To prevent stagnation, these organisations actively encourage innovation and adaptability. They foster an environment where employees are empowered to challenge the status quo and contribute fresh ideas. This forward-thinking culture ensures that the company remains competitive, even in the face of industry shifts.

Succession planning in such organisations is a delicate balance of nurturing existing talent, encouraging a culture of growth, and preparing for the eventual transition of leadership. Identifying and nurturing your potential leaders in advance mitigates the disruptions caused by the departure of key personnel due to retirement, resignation, or unforeseen circumstances. If you want to discuss succession planning within your own business, please get in touch with us. We would be happy to consult and share some insight.