Strategic planning is creating specific business strategies, implementing them, and evaluating the results regarding a company’s long-term goals. It is an approach that focuses on engaging various departments within a company to accomplish its goals. The term strategic planning is essentially synonymous with strategic management.
A strategic plan identifies an organization’s overall vision. These are critical elements in determining the future staffing needs of the organization as they clearly indicate the company’s direction and provide insight into how the business needs to develop (and deploy) its employees over the next few years.
Often organizations fail to look at the people aspect of the strategy that aligns with the successful execution of the Business strategic plan. However, once an organization understands each business group’s directional vision, it can start aligning talent appropriately. In doing so, succession planning turns into an integrated aspect of the overall company strategy.
While more organizations have started to use strategic planning for succession, this is usually limited to Sr. Leadership positions vs. the entire organization at all levels. However, there is value in extending the succession planning conversation beyond executive leadership and into each level of the organization. While this type of planning requires a dedicated amount of time and effort, a well-thought-out plan drives company growth, employee satisfaction, and ultimately retention of top talent.
Any good business leader knows that success today does not guarantee success tomorrow. Therefore, people leaders need to evaluate the performance of high potential talent members regularly.
“Strategic succession planning should occur within the three hierarchical levels of an organization: executive leadership, mid-tier management, and individual contributors”
Strategic succession planning should occur within the three hierarchical levels of an organization: executive leadership, mid-tier management, and individual contributors. It is critical to support communication and interaction among leaders at all levels to help with aligning to an effective plan.
How does one create a comprehensive succession plan if it hasn’t been done before within the organization?
To start, organizations should develop a list of existing skillsets by role profiles. Once the business leaders know the employees’ skills and knowledge, they can determine what gaps exist compared to the personnel plans. Assessing the employees against this list of skills is an integral part of succession planning as it will help identify current gaps within teams.
Having employees complete a self-evaluation of their skills on their years of experience using the skill and approximate level of aptitude will create a baseline. Then, the manager or people leader would rank each of their reports the same way.
Engaging in open development discussions is the next step. Inviting employees to talk about their preferred future roles within your company will help succession planning. For example, are they looking to stay in the same area of the organization but get promoted? Do they want to leverage their transferable skills into a different role? Understanding where development and growth interests align will help categorize talent availability and potential gaps.
While employees may tell you where they’d prefer to be assigned, leadership will need to determine whether this is realistic or not. Each employee’s current skills, performance level, and ability to grow must be considered. Some employees may perform excellently in their current roles yet might be challenged by new expectations. On the other hand, some employees are high-potential members who need to be encouraged toward leadership positions.
It is essential to communicate with high potentials that they are aligned to fast-track opportunities. Often organizations withhold this information as they fear high-potential employees will act entitled. High-potential employees need to be told about their status, or they will begin to explore other opportunities with other organizations. Keep in mind that one of the top reasons employees leave companies is a lack of development or understanding of their next role. All employees must be provided with a development plan that aligns with their future goals. Keep in mind that it might take some employees longer to achieve these goals vs others.
Succession planning conversations should be focused on helping employees reach their potential while also filling in any planned gaps that organizations might have based on internal movement or attrition. After each succession planning conversation, people leaders should have a list of gaps that must be closed to ensure succession. They should also be accountable for their performance review to support the team’s progress.
Some employees may require additional training or stretch assignments to gain new skills as part of the development conversations. Cross-departmental opportunities and exposure are great ways to gain transferable skills. Select the appropriate action plans to help close the gaps needed for the employee’s development and ultimately make them a fit for the succession plan.
The volatility of the talent market and challenging business environments can cause many organizations to adopt reactive strategies rather than proactive ones. However, a reactive approach only works for short periods and may require spending many resources to execute. Strategic succession planning helps companies prepare proactively to address issues with a long-term view and enables organizations to help retain top talent instead of just responding to various situations.