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How to Create a Succession Plan

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Volume 49, July 2013
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Andrew Miller

The monthly electronic newsletter presented by Andrew Miller.

My newsletter focuses on providing ways to generate dramatic ideas and quickly improve the speed, performance and profitability of your organization.

How to Create a Succession Plan

I just recently saw the results of a study from Odgers Berntson from 2011 showing some very frightening statistics about executive succession planning. When you look at the numbers below, think about how your organization is handling this issue.

  • 17% of organizations expect to lose more than 50% of current leadership by 2016
  • 25% expect to lose more than 20% of leadership
  • 68% have no executive team replacement strategy
  • 43% anticipating a shortage of executives by 2016

The first question that comes to mind is, "What are we doing about it?" I would be interested to know if the answers from these same executives have changed since 2011. This shows a clear lack of succession planning, which is something that we see every day. For some reason most organizations don't do it. As a leader, one of your accountabilities is to find a top-notch replacement for yourself. We all know this, yet it's often not done effectively.

But all is not lost. We can start right now with developing better succession plans for key roles. Here's how to get started immediately:

  1. Identify the critical roles in your organization. Which roles have the most impact on the success or failure of your organization? Hint: These do not have to be only executive positions.
  2. Determine the critical outcomes for which those roles are accountable. What is the expectation in terms of results (not just what is being done today)? Remember to focus on results and outcomes, not activities and tasks.
  3. Determine the skills and background required to perform those roles well. Are the skills and expertise different from what is currently required?
  4. Identify key performers in the organization and assess their capabilities for the best fit. You want to find the right fit for these key performers to challenge them enough to stay engaged where they can learn and have a positive impact.
  5. Develop a plan for those key roles. This includes assessing the current people in the role and looking at potential candidates for the role (including your key performers identified in step #4). Who needs to be involved in the planning? What is the transition plan? What is the timing for transition?
  6. Be open and transparent in communicating the selection process, the criteria and the time line for those critical roles. Everyone in the company should have advanced notice of when a new leader will be taking over and what the transition will look like.
  7. Know the future vision and direction of the company. This will help with the selection process so you can match the leaders' skill sets with the direction of customers and the business.
  8. Begin to decentralize some decision-making. Organizations that give employees the ability to make decisions on their own will be better insulated when someone from the top leaves as there is less reliance on them to make all decisions.

Succession planning is one of the key areas that many organizations need to improve upon. Knowing who the next top managers and executives will be allows you to maintain consistency in the direction of the organization and often makes the leadership transition easier.

Please note that we grow our business through referrals and would never be too busy to speak with a friend, family member, acquaintance or colleague if you think we could be of assistance.

Please contact Andrew Miller at 416-480-1336 or visit our website at www.acmconsulting.ca

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© Andrew Miller. All rights reserved. 2013.