Leading Forever with no Exit Plan or Simply too Busy
According to an independent survey commissioned by Robert Half in November 2022, 1 in 4 business leaders don’t have a succession plan for top roles. The statistic rises to nearly 1 in 3 (32%) for small to medium enterprises (SMEs). The report also reveals that 49% of respondents said they were not planning to leave in the near future while 40% are too busy with other priorities. However, delaying succession planning could have a devastating outcome for the future of the business, its leaders and culture.
Whether it’s a Board directive or just good business practice, having a continuity plan in place to document the future leadership needs of your organisational structure is essential. Succession planning is like tending to a garden. Just as a gardener carefully plants seeds, nurtures them, gives them sunlight, water, and care, a company must cultivate and develop its future leaders over time. Just as a gardener plants seeds, nurtures them, and ensures they receive the care they need; a company must develop and cultivate its future leaders over time. Like the gardener planning for the eventual growth of plants, a company must identify potential leaders and prepare them for leadership roles before they are needed.
The Risks of Neglecting Succession Planning
Change is inevitable. Without investing in leadership development your organisation could be at risk of:
- Losing top talent and experiencing high staff turnover
- Losing corporate knowledge
- Promoting the wrong individuals
- Negatively impacting company culture
- Misalignment between talent strategy and business needs
- Losing confidence from investors and stakeholders
- Increased reliance on external recruiters
The consequences of not having a succession plan are far-reaching and can significantly harm an organisation’s stability, performance, and growth.
Investing in your Leaders: A Proven Approach
Implementing succession plans has been a gamechanger in my HR experience. Over the course of 10 years, I recruited young part-time graduates and supported their career development, transitioning them into full-time roles and aligning their professional goals with the long-term vision and objectives across multiple subsidiary companies. Many of these individuals continue to hold senior positions within these companies, with one having advanced to the role of Managing Director.
This approach is built on two key components. First, the recruitment strategy filters for values alignment between candidates and the organisation, fostering diversity within teams and ensuring complementary skill sets that enhance the existing workforce. By cultivating a people-centric culture, clear career pathways were established, providing a strategic vision for employees’ long-term growth and development.
The other key component to building the piplein was to connect career mapping with leadership development through skills gap analysis to enhance leaders’ abilities and identify and grow talent. This approach not only cultivated a talent pool of young leaders ready to step up at any moment but also increased their employability by boosting their personal brand and profile. While some might argue that employees may seek opportunities elsewhere and the company may lose its investment, my experience has shown that it strengthens the bond between employer and employee and maintains continuity.
Succession planning became pivital as these career pathways developed, providing the Group CEO with the opportunity to focus on mentoring, vision, innovation and execution. By encouraging a growth mindset and offering a pipeline for promotion, we avoided the stagnation that comes with employees feeling like leadership opportunities were a distant prospect. The benefits of retaining top talent include:
- Continuity of leadership
- Reduced risk of talent gaps due to retirement, illness, resignation or leadership changes
- Retains corporate knowledge and valuable intellectual property
- Leaders who are already aligned with long term goals and strategic vision
- New leaders can be brought up to speed quickly
- Attracting top talent when an internal succession plan is in place
- Demonstrates organisational stability
- Gaining a competitive market edge
- Better resilience in the face of economic downturns or industry disruptions
While it can be unhealthy for leaders to stay in roles for too long, stifling innovation and adaptability, promoting new talent can avoid the risk of being unprepared for leadership transitions, having a talent pool with broad knowledge available for transition.
“Succession planning is not an event, it’s a process. And it’s never too early to start.”
– Warren Buffett
Securing Leadership for the Future
To ensure the long-term success of your organisation, it’s crucial to embrace succession planning as an ongoing, proactive process. By continually identifying and nurturing future leaders, you create a resilient business that can adapt to change and thrive in an evolving market. A strong succession plan not only reduces leadership gaps but also boosts employee morale and fosters loyalty.
Investing in your team’s development is not merely about filling leadership roles; it’s about cultivating a pipeline of talent that drives innovation, supports a strong company culture, and keep your business competitive. Whether your company is large or small, implementing a robust succession strategy today will pay dividends for years to come, ensuring your organisation continues to grow, innovate, and succeed long into the future.
Reflect on this:
Are you prepared to cultivate the next generation of leaders within your organization, or will you risk leaving your future success to chance?