When an organization wants to achieve business continuity while retaining intellectual capital, it must have a succession plan in place. Having a plan in place ensures companies don’t lose their best talent, and when they do, they have the internal plan to quickly replace and get going again.
Find out what succession planning is, why it’s essential, and how former CEO of Royal Cup Coffee, William Smith, can help businesses have a foolproof succession plan in place.
What is Succession Planning?
Succession planning identifies potential future successors to essential roles in an organization. It seeks to identify those who can take over critical roles in case the current holder of the position exits the company or is redeployed to another role within the organization.
In succession planning, an organization ensures it never has a critical position open for which another staff member is not prepared to take over the role. This is important as organizations develop the talent on the bench, ready to come into the field of play when called upon.
Whereas an organization may face a situation for which they are unprepared, succession planning ensures a systematic process of filling roles with minimal disruption to the workflow. Succession planning is relevant to organizations of all sizes and types, from large companies, small businesses, family-owned enterprises, and non-profit organizations.
Business Case for Engaging in Succession Planning
Here are reasons why succession planning is important to all types of business:
Adapting to Changes in Demography and Talent Shortage
Demographic shifts are bound to occur, which inevitably leads to stiff competition for talent in the job market. Candidates in the job market may not be the best fit to fill roles in the organization because of their inexperience. They may also lack the core skills required to fill these positions. Having a succession plan ensures organizational knowledge is passed from one generation of leaders to the next almost seamlessly.
Business leaders see the lack of essential skills as a foremost concern that requires addressing. Combined with the gradual exit of baby boomers, these trends necessitate the need for succession planning to meet the impending talent deficit.
Identifying Gaps in Skills and Competencies
Succession planning enables an organization to identify existing skills gaps and competencies. When identifying who may fill specific roles, an organization may hire a consultant like William Smith, CEO, and founder of Double Iron Consulting, to analyze the current employee population. The analysis may reveal some employees who may be suited for other positions.
Retaining and utilizing Organization Knowledge
Knowledge management entails identifying, retaining, and utilizing organizational knowledge for the benefit of the organization. Succession planning enables an organization to benefit from the knowledge inherent in the employees. Using this knowledge allows an organization to maintain a competitive advantage which is essential in hitting other parameters such as customer numbers, profits, sustainability, and impact.
Most importantly, knowledge management reduces the learning curves required for important positions by using the knowledge in the minds of employees. Succession planning allows sharing of knowledge to take place concurrently, enabling the successor to gain essential skills on the job. Succession planning also diminishes the necessity for extensive recruiting and formal training, saving organizational resources.
Succession planning boosts the morale of employees significantly. When employees know they are likely to take up higher positions in the organization, they will work harder to merit the promotion. This may not be the case when recruiting outsiders to take up positions, hence dimming the hopes of existing employees.
The Herzberg motivation theory states that employees are likely to be motivated when an organization meets their personal development needs. Therefore, a properly designed succession plan is a unique way of motivating employees.
Tips for Effective Succession Planning
The following tips are essential in succession planning:
Proactive: Don’t wait until it’s too late to start succession planning. Being proactive ensures an organization is not caught off-guard.
Pinpoint potential successors: Identifying promising successors ahead of time allows for requisite mentorship and training to take place.
Inform the successors: It’s important to notify the successors that the organization is looking to prepare them for certain positions.
Integrate succession planning with hiring: Tie future recruitment drives with succession in mind. This makes it easier to have a pool of potential successors.
About Double Iron Consulting and William Smith
When it comes to succession planning, William Smith brings an unmatched wealth of experience. As the former CEO of the family-owned business Royal Cup Coffee, William Smith was involved in the business from early on, working in sales, distribution, and even coffee roasting.
After several years at the helm, William Smith stepped down as CEO of Royal Cup Coffee. William Smith sits on the board, providing much-needed input as necessary. The desire to help businesses navigate succession planning is one of the reasons William Smith founded Double Iron Consulting.
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