You buy insurance against a variety of catastrophes that can impact your business. Business Income Insurance, Workers’ Comp Insurance, even Data Breach Insurance – all are important for helping ensure continued operations during difficult times. Succession planning is similar. It helps to ensure your continued business success when a key employee leaves.
During the “great resignation” we have had to do emergency recruiting for many clients who lost senior employees due to unexpected retirement or finding a new job. The employers struggled because they did not have the succession plans in place to fill these important positions.
What is succession planning?
Succession planning is sometimes referred to as “bus-proofing.” If your best employee gets hit by a bus, what would you do?
There are two aspects to succession planning that you need to consider. First, requires building your internal bench strength in key positions, so that when someone leaves, you have a backup. Second involves developing plans to improve the performance of people in key positions where they aren’t meeting the requirements.
Succession planning is a constantly evolving process and it can’t be done in a vacuum.
How to build your succession plan
Succession planning doesn’t happen all at once. Breaking the process down into smaller pieces helps you focus on the roles that are most important to your company. The steps we use with our clients include:
1. Identify your most important roles
Identify the roles that are most important to the success of the company (either now or in the next 3-5 years) and compare them to the strength of the talent you have in those positions. We use a 2x2 matrix:
High Importance/Low Talent = Highest priority
High Importance/High Talent = Priority
Low Importance/High Talent = Lower Priority
Low Importance/Low Talent = Low Priority
2. Build the job descriptions and key roles & responsibilities
Starting with the highest priority positions, define (or revise) the job description as well as the main roles & responsibilities. Build the “perfect” job description for the company. Don’t take into account the skills of the person currently filling the role. In addition, identify the skills, experience and training needs required for someone to be successful in the position, and start to identify what skills will be required to future proof it. You can set up a skills matrix to track what is required for each position – the Michigan Manufacturing Technology Center has a great tool for this.
3. Assess your employees
Now that you have the job descriptions, roles & responsibilities and skills matrices for your most important positions, you can begin to assess your talent. Look at the people currently in the positions as well as others across the organization who, with the right training, might be capable of doing the job. By putting names and skills into the matrix, you will begin to see the gaps that need to be filled (for both the current talent and future talent).
4. Communicate
Communication is crucial to successful succession planning. When you know what is needed to be successful in a role and you have an idea of who could fill it in the future (with additional training), have that conversation. Our research has shown that employees want to feel valued by the company and to know that there is a growth plan for them. Communicating your plans for their future growth increases engagement and makes your employees less likely to leave. Even if they are not ready to take on additional responsibility now, they will appreciate the outreach and you can check back with them later.
5. Follow through
Once you have your succession plan (Key roles, skills matrices, employee assessments, communication), you need to follow through on it. If you have promised training to your employees, make sure it happens. Too many companies allow “fires” to be an excuse to cancel training or delay skills development. In manufacturing, there is never a good time for someone to be out for training. Cancelling training in the short-term may feel like the right decision, but it will impact your long-term ability to bus-proof your company and will hurt overall employee engagement (by not walking the talk).
Succession planning is critical to your business success as well as to employee engagement and retention. By taking the time and effort now to build a solid succession plan, you can future proof your company for the long-term.