Where is your succession candidate hiding?
Are you an organ donor?
Do you ever wonder about who will get your heart, lungs, or liver when you no longer need them?
You can think about succession planning that way. Once you’re done with your career, who will get it? You can’t choose who gets your organs, but you can select your successor in business.
This is the most important step in succession planning. If you have the right person, you’ve taken the biggest step toward a successful transition.
But how do you do it?
Candidates can be found within your company or can come from without, so start within your firm and go from there.
Possible successors are usually identified in a group known as ‘high potentials’, meaning they have a high potential to be a good candidate. It’s an awkward name, but it is accurate.
You need to look at who requires a successor. Not everyone in the organization needs a succession plan in place for them, in reality they may not be that crucial to the company. Sometimes it’s just a matter of hiring a replacement.
This is what the Velsoft production team has to say.
“The critical people for your succession plan are those whose absence directly interferes with business operations. In a small, family-run organization, this could be just two people (namely mom and dad), and in a medium-sized organization, this could just be four people (for example, the CEO, COO, HR Director, and CFO). As things get larger, the numbers will increase. Beyond those first people that you identify, you must delve down at least two layers to reach all of the people involved in your succession plan.”
Leadership quality assessments can help identify possible internal candidates. Performance reviews can also be helpful but are a minor tool. The assessment should be ongoing during the candidate’s tenure with the company combined with training to groom them for a succession position.
That takes care of looking within, but what about external candidates?
Stephen A. Miles wrote for Forbes that when bringing in an external candidate for the CEO position, recruit them at a lower level to give them a chance to be observed over a period with the company.
He also cautions against the “ready now” label. “Anyone named as a successor has learning to do and mistakes to recover from. Part of the succession-planning process must be to take advantage of the time between the announcement and the acceptance of the top job so that the leadership can address as many needs as possible.”
Michael Beck comes down on the side of promoting an internal candidate, but he states that this may not always be the best course to follow.
“But as the stakes get higher, it becomes more important to have candidates who already have the needed interpersonal skills, strategic thinking, and P&L savvy – regardless of whether they come from within the company or from without,” he wrote.
Either way a well-developed succession plan is the road map competent leadership teams need to follow to guarantee a transition which is as painless as possible.