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Succession Planning (With Free Template Downloads)

Learn how to create a succession plan in 5 steps using these templates and examples. Download template for free (PDF or Word).

Succession planning is a crucial part of ensuring your company’s longevity and security. If you set a comprehensive plan in place early on, your organization can navigate leadership transitions and other unexpected events with ease. A successful succession plan involves several important steps, including identifying key positions, choosing qualified candidates and training promising employees.

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Components of effective succession planning

Succession planning is the process of choosing certain qualified individuals to be promoted into high-ranking roles within an organization. Many companies identify these employees early in their careers to ensure that they are well-trained when the time comes for them to step into a new position. Most organizations have succession plans in place for their executive team, which usually includes the CEO, CFO or president. Other succession plans include replacements for department heads, managerial roles and other key positions.

There are a number of important components to consider when succession planning. These include:


The first component of succession planning is the positions that need to be filled. Succession plans usually revolve around roles that are critical to the company’s ability to function. This includes leadership positions, such as the CEO, and highly-skilled roles, like the lead accountant.


The incumbent is the person who currently fills the position. When forming a succession plan, consider whether or not the incumbent is high-risk. For example, an older incumbent with known health issues necessitates a more accelerated succession plan than someone who is younger and physically fit.


The succession candidates include employees who are qualified and willing to fill the necessary roles. Most succession plans maintain two to three candidates for each role. That way, if any of them decide to leave the company or relocate, there is no need for the process to restart. Instead, the company can simply move down the list to the next candidate.

Readiness rating

Succession plans should include a rating system that measures how prepared a candidate is to step into a role. For example, a promising but inexperienced candidate with the potential for success might be given a readiness rating of five. An older employee who has been with the company for several years and already held multiple leadership positions might get a score of eight.


Another key component is the succession timeline. When drafting a plan, many organizations allow for two categories of events: death/accident and retirement. Death/accident plans are reserved for worst-case scenarios and should be finalized well-before they are needed. Retirement succession plans are usually executed gradually over a long period of time and often focus on a predetermined date, set several years in the future.

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How to create an efficient succession plan

Here are some steps you can take to write succession plans that help you navigate leadership transitions efficiently:

1. Make it collaborative

One of the ways to improve your plan’s efficiency is to involve other members of your leadership team. Chances are high that they know some of your employees better than you do, and they may provide insight into which candidates have the most potential for success.

2. Find multiple candidates

Business owners often choose to leave the company to their children or to one of the business partners. While this is certainly a valid decision, you should also select one or more other candidates who can take over in the case of a tragedy. Choosing two or three candidates for each position ensures that a role is never left unoccupied.

3. Choose an efficient format

Succession plans can take many different forms. Some business owners choose to maintain a simple chart while others draft multiple-page documents. The complexity of your plan often depends on the specific nature of your company’s leadership team. Conducting thorough research and looking at different examples of succession plans can help you find the format that best suits your company.

4. Determine the value of your business

Estimating your company’s value is an important task that often complements the succession process. Before retiring, it is crucial that you find out the value of your business so that you can calculate your own net worth. Knowing your company’s value is also critical if you decide to sell your business at the time of your retirement.

5. Consider the funding

If your succession plan involves someone else buying or running your business, make sure they can afford to do so. Leaving your business to someone who is not financially capable may result in a loss of profits or even bankruptcy. Some business owners mitigate this problem by requiring their successor to sign a buy-sell agreement, which states that they will take out a loan or liquefy certain assets at the time of transition.

Sample succession plan templates

Here are two samples you can use to help you formulate your succession plan:

Template 1: Succession planning chart

Template 2: Succession planning order of events

The following list of steps for a succession planning process is based on materials provided by the organization’s department of Human Resources. This plan is a “work in progress” and may be edited and updated as the need arises.

1. [Establish a comprehensive list of succession priorities (missions and goals)]

2. [Evaluate current board roles and determine the priority level of each]

  • [List key positions and the current incumbents]
  • [Determine if there is any need for the duties associated with the roles to change in the near future]

3. [Identify the leaders for whom successors are necessary]

4. [Determine key qualifications that candidates must possess to be considered for each role]

5. [Decide on the order in which candidates will be offered the positions]

6. [Create a development plan for each potential candidate and prepare them for the leadership position]

  • [Engage in development activities with each candidate]

7. [Monitor their progress and install new leaders when necessary]

8. [Evaluate new leaders and their ongoing performance]

Succession planning template for PDF & Word

Check out our succession planning template to help you plan for the future.

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*Indeed provides these examples as a courtesy to users of this site. Please note that we are not your HR or legal adviser, and none of these documents reflect current labor or employment regulations.

Succession plan examples

Here are examples of succession plans:

Example 1: Succession planning chart

Example 2: Succession planning order of events

The following list of steps for a succession planning process was written by Westgate Realty’s Department of Human Resources. This plan does claim to be comprehensive and may be edited and updated at any time.

1. The primary goal for this succession plan is to facilitate peaceful and efficient leadership transitions in the events of retirement, resignation or unexpected tragedy. This plan reflects Westgate Realty’s values by ensuring that the continued success of the company remains a high priority.

2. The positions under consideration are as follows:

  • CEO – Alexandra Ruiz
  • Vice president – Max Carter
  • District manager – Sarah Newman
    • At the time of Newman’s retirement, the DM’s responsibilities will be merged with those of the Regional Manager.
  • Office manager – Amy Jun
  • Director of marketing – Jane Alwell
    • At the time of Alwell’s retirement, an Assistant Director position will be created and the responsibilities will be divided.
  • Client relations supervisor – Christine Bradford

3. Current employees who intend to retire in the next five years include:

  • Sarah Newman
  • Jane Alwell

4. Qualifications for key roles include:

  • District manager
    • Organizational skills
    • 10+ years of managerial experience
  • Director of marketing
    • Impeccable creative portfolio
    • 8+ of marketing experience

5. The current candidates for the key roles in order of readiness are:

  • District manager
    • Neela Mathur
    • Toby Ryder
    • Kavion Jones
  • Director of marketing:
    • Isa Green
    • Lilly Ravel
    • Adam Thiers

Succession planning FAQs

Here are answers to some frequently asked questions concerning succession planning:

Does my company need a succession plan?

Every business owner with a successful, profitable company needs a succession plan. A succession plan is a necessary step for ensuring that your business continues to thrive even in the event of loss of leadership. A succession plan can help you prepare for the future, avoid miscommunication and make sure that your company upholds the values and goals that were set when it first began. If you are concerned with how your business would be impacted by an untimely illness or death, formulate and implement a succession plan.

When should I create a succession plan?

Creating a succession plan is similar in some ways to creating a will. Some people wait to write their wills until after they are retired or diagnosed with a serious illness. Others write their wills much earlier after they have children or acquire significant assets. You can create a succession plan at any time, but it is generally a good idea to write one as soon as possible. Succession plans are primarily used to lessen the negative consequences of unexpected events, so the earlier you write them, the more beneficial they can be.

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