Could someone easily step in and do your job if you left the company today? What about other financial executives in your organization? Who is waiting in the wings to take their place — and are those understudies ready for the spotlight?
If you don’t have a succession plan, you’re not alone. In a recent Robert Half Management Resources survey, about half of financial executives reported that they do not have such a plan. Among those respondents, 64% said it is because they do not intend to leave the company in the near future. Other top reasons cited include a lack of qualified candidates in the current organization and the need to focus on other priorities.
View our Planning for Success(ion) infographic, which includes the survey results by company size and highlights five risks of not having an identified successor, here.
Because succession planning is about making a plan for the future, and not addressing an immediate business priority, it’s a process that’s often pushed to the back burner. But Robert Half senior executive director Paul McDonald cautions that not having a succession plan, particularly at the executive level, puts the business at risk. He says, “Succession planning may feel like a long-term initiative, but the pain felt watching a star employee walk out the door with no backup in place is immediate and costly."
Make it a priority
So, when is the right time to start thinking about succession planning? During the hiring process, actually. When interviewing candidates for any role in your organization, you should think about their future potential. Could they be groomed for leadership roles? More important, would they be interested in building a long-term career at your company?
And don’t forget about your current employees. Make the point to talk with staff members about their professional goals, and develop career ladders that can help them to reach their objectives.
Take a wide view
While it’s important to create succession plans for major roles in your organization, avoid focusing only on top positions at the company. There is value in creating succession plans for employees at all levels. It’s an effective way to identify rising stars. Plus, it will help you to pinpoint skills gaps in your team, so you can provide appropriate training and development.
To help all employees think more about where they are in the “big picture” at your company — and where they might stand in the future — be open about your plans to make succession planning a more formal process. Explain why you are stepping up efforts, how you will be structuring the process, and how succession planning can be a path to new opportunities for top performers.
Tim Hird, an executive vice president with Robert Half, suggests that financial executives look at succession planning as more than just ensuring continuity, however. He says, "In addition to preparing the company for inevitable change, it creates a culture of professional development, enhances knowledge-sharing between existing leadership, and helps identify and retain future leaders."
Have a contingency plan
Change is a fact of life — and business. Companies that are prepared to meet the challenge of change are more likely to sustain peak performance. Of course, no matter how well you plan ahead for inevitable changes in the lineup of your team, there’s always the possibility you’ll be caught off guard by a key employee’s sudden departure.
So, it’s wise to have a contingency plan for your primary succession plan. For example, when a sudden vacancy does arise in a critical role, bringing in an interim management consultant is one strategy for filling the gap. Then, the business can take the time necessary to search for a full-time replacement or prepare an existing team member to take on the role.
Without a succession plan, and a contingency plan for that plan, business productivity and operational efficiency could suffer. And it is well worth the effort to think ahead: An orderly succession ensures that a leadership departure remains a manageable event rather than an organizational crisis.