Key takeaways

  • Succession planning is the act of developing long- and short-term strategies to fill critical roles when they become vacant.
  • Both SMBs and enterprise organizations need effective succession plans to maintain business continuity during organizational changes.
  • Formalized training and development programs prepare emerging leaders to step into leadership positions when the time comes.
  • Apr. 8, 2024: Shelby Hiter restructured the content for improved readability, expanded the definition of succession planning, and provided additional examples of succession planning in a SMB context. She also added information about the requirements and best practices for effective succession planning.

Top succession planning examples

Because there are so many different scenarios for which succession planning is necessary, it can be difficult to know the best way to approach succession planning for your organization. Most succession plans generally fall into one of three categories: long-term/target-date plans, training-based plans, and situational/emergency plans.

Long-term succession planning

Long-term succession planning focuses on identifying and preparing someone for a role long before it is actually open.

Because of the gradual training that goes into this type of succession planning, it primarily focuses on developing and promoting individuals from within the existing ranks. In many cases, this type of succession planning begins with hiring someone for a role that comes with well-defined opportunities for advancement.

Sometimes, long-term succession planning is motivated by a clear timeframe for a position’s vacancy. For example, if you know your CEO is planning to retire in two years, you know exactly how long you have to identify and develop their successor.

In most cases, though, long-term succession planning does not have a firm deadline; the strategy is in place to provide an onramp for the next leader to step into each role with as little disruption as possible.

Requirements for long-term succession planning

For long-term succession planning to be successful, business leaders must recognize, train, and nurture high performers over time to set them and the organization up for success. That way, when the opportunity arises to take on a key role, that individual is well prepared to assume their new responsibilities.

This strategy takes time, but it’s much easier the sooner a company recognizes the potential of high-performing employees and implements development pathways. Long-term succession planning requires a number of ingredients that maximize employee retention:

  • A supportive company culture with competitive benefits.
  • Performance and talent management tools that help managers identify top internal talent early on.
  • Robust learning and development programs that are personalized to employees’ goals and strengths.
  • Regular transparent communications and performance reviews that give high performers a chance to receive feedback and learn more about the organization’s plans for them.
  • If no internal candidates make sense for the role, HR and recruitment teams will need to spend time defining the role’s key responsibilities and completing outreach efforts with eligible candidates.
  • A succession plan template may also be a helpful tool to keep your long-term plans organized, even as other organizational variables change.

Though it requires sustained effort, long-term succession planning is more effective than getting caught off guard by someone leaving and scrambling to train an employee to take their place.

Long-term succession plan example

The CEO of your organization has announced to the rest of their leadership team that they plan to retire in four years when they turn 65. Before this announcement, the CEO has already documented their responsibilities, their preferred successor(s), important points of contact, and any other information the organization may need to manage change across the organization and with client relationships.

Ideally, the CEO’s preferred successor has already started receiving mentorship and guidance to prepare them for the role. Your HR team uses the succession plan to identify additional development opportunities and works with the successor to create a four-year plan that will enable a smooth transition.

As a fail safe, the succession plan also clarifies if and when the talent acquisition team should start reviewing external candidates for the role. If it becomes clear the tentative successor isn’t right for the role, a list of backup options ensures the company’s sustained success regardless of who ultimately takes over as CEO.

Use our complete guide to employee development plans and free template download to get started!

Training-based succession planning

Your learning and development or HR team can create an internal educational academy or e-learning program, complete with a curriculum that trains and develops employees as future leaders in the company. This kind of formal training accelerates employees’ progress toward professional goals and helps them prepare to advance in their roles once they complete the training. 

Formalized, training-based succession planning also supports diversity, equity, and inclusion (DEI) efforts by helping employees get promoted into leadership roles based on merit and a demonstrated commitment to growth and development. Without a structured training program in place, managers’ biases may cause them to choose successors based on who’s a longstanding or favored member of their team rather than who is most qualified.

Training employees across teams and experience levels provides more employees with a chance to progress in their career trajectory — not just those employees who work closest to the C-suite. Ultimately, this strategy increases the pool of quality candidates to build a pipeline for important roles.

Requirements for training-based succession planning

To successfully implement an education-based succession planning program, it’s important to do the following:

  • Create a training program that balances general leadership and more specialized skills.
  • Give all employees an equal opportunity to access training and development opportunities.
  • Incorporate regular assessments and performance reviews into the training cycle.
  • Ensure training and certification programs are included as milestones in your role-banding and promotional paths.
  • Invest in a learning management system (LMS) that allows employees to take charge of their own growth opportunities.

Also read: LMS Features You Need for a Great E-Learning Program

Training-based succession plan example

Your small B2B technology marketing agency has traditionally focused on digital marketing campaigns and content strategy, but your leadership team wants to establish an additional revenue stream by developing a proprietary software product. Many members of your team know this market well but don’t have direct product development, marketing, or sales experience.

Instead of creating an entire team of net-new hires to support this new business initiative, your leadership team has decided to start an internal training program to prepare selected individuals to transition to product team roles, including:

  • Product designer.
  • Product strategist.
  • Product marketing specialist.
  • Product account executive.

With this training program, internal members of your team are given an exciting opportunity to learn new skills, advance their careers, and use their institutional knowledge to help onboard other product team members.

Situational or emergency succession planning

Not all role and leadership transitions can be planned: An important executive may suddenly need to take an extended leave of absence for medical or family reasons. A CEO may suddenly choose to or be asked to step down for the good of the company. A new federal or industry regulation may require you to bring on a compliance management professional on short notice.

In these types of scenarios, an emergency succession plan is the best way to stabilize your company through the turbulence.

Both situational and long-term succession plans acknowledge the fact that every person at the company will leave their roles eventually; the difference is that a situational succession plan is a contingency if the details of when and how someone exits diverge from the original plan.

Requirements for situational or emergency succession planning

Because this type of succession planning is rooted in the unknown, it’s impossible to prepare for every possible scenario. Like all good contingency plans, however, preparation involves identifying key figures at a high level and defining an order of operations that can go into effect automatically:

  • Identify the roles that are critical to business operations — CEOs, VPs, department heads, etc. — and document each role’s core responsibilities and job functions.
  • Determine which individuals or groups are most equipped to cover each responsibility short-term, and provide training/resources as needed.
  • Assemble an emergency response team who will coordinate to find a long-term solution.
  • Prepare detailed documentation that references other emergency response plans for health and safety, public relations, client relations, etc.

Emergency succession plan example

Your organization’s marketing director has suddenly become ill and needs to take a leave of absence for a couple of weeks to recover. The emergency succession plan outlines their core responsibilities, such as approving budgets, reporting departmental performance to the CEO, and supervising team leads.

The plan also identifies who should cover these duties while they’re away: the finance director coordinates budget approvals, the SEO team lead prepares departmental reports for the CEO, the HR manager sets up regular staff check-ins to address administrative needs, and other essential responsibilities are distributed across the team.

There are also specifications for other variables, like hiring an interim replacement if the director’s medical leave is extended or consulting an external firm about high-level marketing strategy changes.

Succession planning FAQs

Succession planning is the process of ensuring that critical positions — especially those that are highly specialized and further up the ladder — are always staffed. It’s a change management strategy that involves identifying the unique requirements for each essential role and proactively upskilling employees so they’re ready to advance when the time is right.

Forward-thinking succession planning is essential to sustained growth, business continuity, risk management, employee engagement, and retention efforts. However, as companies strategically train employees for future roles, managers need to ensure that employees receive the active support they require to avoid employee burnout.

Depending on the type of succession plan you implement and the goals you have in mind, many people will play a role in succession planning for your organization:

  • Executive leaders.
  • HR teams.
  • Learning and development teams.
  • Individual managers.
  • Third-party consultants.

Companies need to take inevitable turnover into account and have a succession plan in place to keep critical roles filled. A succession plan can help maintain growth and stability as well as encourage retention and career development for motivated employees.

Succession planning prepares the company for the loss of key personnel in a strategic and scalable way. The benefits of this preparation include:

  • Business resilience no matter the economic climate.
  • Continued operations with minimal downtime or transitional hiccups.
  • Equitable workloads, so other employees aren’t overburdened by taking over additional tasks as a result of a vacancy.
  • More objective hiring and promotion standards and expectations that help to mitigate unconscious bias.
  • More diverse workforce and leadership makeup.
  • Higher employee retention and engagement

How to make succession planning work for your organization

Succession planning can be a tedious and complex process, especially if your organization is creating different plans for different roles simultaneously. However, the training and strategic work that goes into succession planning pays off in the long run, giving your business leaders the peace of mind to “pass the torch” if necessary. It also provides clear tracks for employees to advance their careers — a critical factor in employee engagement and retention.

The most important ingredient for any succession plan is time and investment in top talent. Browse our lists of top human capital management (HCM) software and top candidate relationship management software to start your succession planning process today.

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