Succession planning in the workplace is not only about determining who will lead your organisation into the future – it’s also about identifying the key positions that are at risk and developing a pipeline of talent which can be drawn from at any time.

According to Bersin by Deloitte’s ‘Predictions for 2016 report’, companies are more virtual than ever before and outsource where they can. As the workforce becomes more contingent, Josh Bersin, principal and founder Bersin by Deloitte, says, “We must work harder than ever to coordinate and communicate with each other, because the top-down management structure is just too slow. All of these changes have profound impacts on HR.” 

He adds, “Let’s face it. We live in a fast-growing, global business climate that demands strong talent strategies – if we do not deliver, we are in trouble.” Against a backdrop of predicted shortages of skilled workers, HR professionals must get an accurate view of what skills exist within their organisations, areas that are likely to be at most risk and where staff can be moved to address potential gaps.

The difference between high potential and high performance

However, before embarking on the process of succession planning, it is vital that HR professionals embrace the important distinction between high potential employees and high performing employees. Organisations need to be clear about this distinction if they want to build strong leadership teams from within.

It is vital that HR professionals embrace the distinction between high potential and high-performing employees

High performing employees, such as top sales people, may not have the potential or the interest to lead larger groups of people, and handle more complex thinking and situations. According to CEB research, high potential employees share three key characteristics – aspiration, ability, and engagement – and they are characterised by an ability to get the best out of other people.

In one survey,  90% of HR people identify succession planning as important and, more specifically, 92.5% say identifying high potential employees (HiPOs) is critical to their organisation’s succession planning – but only 44% have a system for doing so. The key is to integrate the process of identifying and developing HiPOs into the performance management workflow and taking steps to automate some of the process.

As a starting point, when HiPOs are identified during the performance management process, that should be recorded and data on HiPOs captured. Within this system, HiPOs may be linked to one or more talent pools that supply people into specific roles or lines of business. Once allocated to a talent pool, the high potential employee would then automatically be in line for the training and development planned for a position in leadership.

Talent-readiness at every level

Succession planning for businesses is not just about filling positions at the top.

Talent-readiness, deriving from a pipeline of key talent across all departments, functions, and locations, is essential for a flexible organisation to respond to changes in the market.

Here are some tips for succession planning at every level that links performance management and succession planning effectively:

1. Take an inventory of your talent.
   Ensure that individual strengths and areas for improvement are recognised. Segment your talent/roles into critical and non-critical roles and ensure you have identified business critical skills. Understanding which skills may become obsolete or need enhancing is the key to gathering proper talent inventory. Consider determining employee potential and readiness by using the talent bench review table developed by Anderson Leadership Group.
   Assessments, grounded in actual examples of behaviours and outcomes, demonstrated consistently over time, look at performance level. These assessments consider what the employee does and how they do it, and what their ultimate potential level is – the job level the individual is capable of attaining and their readiness for it. The 9-box grid, an extension to the talent bench, is a further valuable talent review tool for tracking progress and development.
2. Prepare competency models based on a rigorous examination of performance requirements at every layer of the organisation.
   This will help determine the link between performance management and succession planning. Plan to develop the future competencies and skills of employees currently in line for leadership roles so that they are put in the best position possible for success.
3. Effective job descriptions are essential.
   By definition, a succession plan is about understanding the components of jobs and the talent landscape, and bringing those elements together to fill future positions.
4. Establish measurable goals to guide succession planning.
   Ensure these goals are aligned to the organisation’s strategic objectives. Goals might include ensuring you have a pipeline of staff for key roles or that people are in development for new roles to support new business. Recalibrate succession planning goals at least annually, assessing changing competitive conditions and organisational priorities. Conduct regular talent reviews to ensure that promotable individuals are being developed properly.
5. Define the roles to be played by each key stakeholder group in the succession planning process.
   Key stakeholders include the board, CEO, senior executives, middle managers, supervisors and workers. Engage senior managers and other stakeholders in the succession planning by establishing clear accountabilities.

Sometimes the process of formalising succession planning within performance management has the unforeseen outcome of identifying the need for new management and leadership roles. This may well be the case when an organisation is growing and needs more middle management or support for emerging functions.

Talent-readiness…is essential for a flexible organisation to respond to changes in the market

Best practice, talent pool-based succession planning focussed on providing high-potential employees with training and development puts organisations in the best position to fill these new roles.

If HR and management work together on scouting and developing top talent using a systematic process for developing management and leadership, the organisation will be future proof and ready to maximise any opportunities.