What is succession planning?

Succession planning is a strategic process for identifying and preparing employees to take on key roles within your organization. It helps ensure leadership continuity when experienced team members retire, resign or transition to new roles.

A strong succession plan goes beyond filling vacancies. It focuses on developing internal talent, supporting employee growth and aligning leadership development with long-term business goals.

This kind of planning can minimize disruptions during transitions, protect institutional knowledge, and position your organization for continued stability. Companies of all sizes benefit from having a plan in place to adapt to change and stay competitive.

What is a plan of succession template?

A succession planning template is an outline that helps you prepare for key personnel changes, especially in leadership roles. It’s a document (or several documents) that identifies high-performing employees with the goal of nurturing and promoting them to fill critical positions.

Typically, a succession plan includes sections for:

• Evaluating current talent
• Identifying potential successors
• Creating employee development plans
• Establishing timelines
• Addressing contingency scenarios

A clear, organized framework enables you to proactively respond to leadership changes, preempt skills gaps and keep the business running smoothly. In essence, it helps you secure your company’s future by thoughtfully nurturing talent.

Why is succession planning important?

Succession planning provides the following benefits:

• Alignment with business goals and objectives: A succession plan ensures that leadership transitions consistently align with the company’s long-term goals, objectives and company culture.
• Leadership engagement: Involving executive and senior leadership in succession planning can foster a stronger commitment to talent development and keep key collaborators informed.
• Development of key talent: Providing clear pathways for high-potential employees can encourage them to pursue leadership roles with your business, helping increase employee retention.
• Communication of roles and expectations: An open succession-planning process promotes transparency and alignment across the organization.
• Efficiency: A succession plan simplifies the process of leadership development and promotion, guiding HR professionals and leadership teams through each stage.
• Consistency: A formal process standardizes succession planning, ensures all collaborators have a clear understanding of the plan and can help remove bias from executive hiring.
• Time management: Taking a proactive approach to succession planning streamlines high-pressure transitions, saving valuable time and resources. Instead of launching an open search, HR can start with the candidates identified in the plan.
• Future-proofing: Identifies and nurtures internal talent to maintain business continuity and stability.

Why does business continuity matter?

One of the primary goals of succession planning is to ensure business continuity when the company goes through unexpected changes. A comprehensive succession plan can facilitate a smoother transition that minimizes disruptions to business operations. 

It supports your company’s commitment to productivity, morale and financial stability during a shift in leadership. Business continuity helps ensure your clients and customers receive reliable and consistent service, which can preserve relationships and build trust.

Prioritizing business continuity can also help the company retain valuable institutional knowledge, reducing risks associated with sudden departures. A proactive approach ensures your organization remains resilient and adaptable, no matter what challenges arise.

Types of succession planning

Proactively planning for succession ensures that your company maintains continuity in crucial functions and roles. There are several ways to approach succession planning; the type you choose depends on your goals, timeline and the roles you need to fill. 

Basic succession planning

Basic succession planning is designed to create smooth transitions within your organization. You might use this process when you have plenty of time to develop current employees in preparation for future leadership roles.

Follow these steps to develop a robust basic succession plan:

1. Identify key positions. Start by identifying critical roles within the organization. These positions are crucial for the operation and growth of your company. If you’re not sure, consider which employees keep critical business functions running smoothly. This could include executives, key technical positions and department heads. You might also include roles that are highly specialized, unique to your organization or difficult to fill due to unusual skill requirements.
2. Assess current talent. Evaluate the skills, experiences and potential of your existing employees. Look for high performers and those who demonstrate strong leadership potential. You might also consider people with unique skill sets that could be useful in key roles. Assess each person’s current performance and capacity for growth and development. Consider also whether they’re interested in advancing within the company.
3. Develop talented employees. Implement strategies to nurture and develop high-potential employees. Prepare them for future leadership by providing opportunities for training, mentorship and exposure to different aspects of the business. Encourage cross-functional experiences to broaden their skill sets.
4. Create succession plans for key roles. For each critical position, develop a succession plan outlining potential candidates and their professional development paths. Build a pool of succession candidates for each role to ensure leadership continuity. Establish clear criteria for advancement, and identify milestones for career progression. Share it with candidates to ensure a fair and transparent process.
5. Monitor and adjust. Review and update the succession plan periodically. Business priorities, organizational structures and employee circumstances can change over time, and it’s essential to adapt the plan accordingly. Continuously monitor the performance and development of potential successors to ensure they’re ready to take on leadership in the company.

Emergency succession planning

Emergency succession planning helps prevent disruptions to your operation if key roles become vacant due to sudden illness, unexpected departures and unforeseen circumstances.

The following tips can help you create an emergency succession plan:

• Identify critical roles. Pinpoint roles that are vital for day-to-day operations and long-term success.
• Designate backup candidates. Identify backup candidates who can be ready to step in. These individuals should be trained and prepared to assume their new responsibilities if needed.
• Document processes and procedures. Document key processes and procedures to give backup candidates everything they need to quickly get up to speed. Ask the person who works in each critical role to keep records of essential knowledge, contacts and information for their position.
• Communication is key. Communicate openly with your team so everyone understands their roles and responsibilities in the event of a sudden change.
• Create an action plan. Streamline an emergency role handover by creating a list of everything that must happen to put the new person in the role. This might include changing authorization levels for key technology and financial systems, providing access to critical documents, notifying collaborators and fulfilling compliance requirements.

Executive succession planning

Crafting a CEO succession plan involves identifying and preparing potential successors for the executive position. Follow these tips to navigate CEO succession planning effectively:

• Define leadership qualities: Determine the key qualities, skills and experience required for your company’s CEO role, and identify a potential successor for the position. Consider individuals who also embody your company’s values and vision.
• Develop internal talent: Cultivate internal talent by providing leadership development opportunities and mentoring programs. Invest in the growth and advancement of high-potential employees who demonstrate the willingness and capability to step into the CEO role in the future.
• Consider external candidates: While you might prefer internal candidates, it’s also important to consider external candidates who could bring fresh perspectives and experiences to the table. Assess each person thoroughly to ensure alignment with your company culture and strategic goals.
• Succession planning committee: Establish a dedicated succession planning committee responsible for overseeing the CEO succession process. It should include key collaborators, such as board members, executives and HR professionals.
• Transparent communication: Maintain transparent communication with collaborators as you create a CEO succession plan. Keep investors and other relevant parties informed to build trust and confidence in the leadership transition.

Identifying and nurturing high-potential employees

Regardless of the type of succession planning you use, identifying future leaders is a crucial step. Assess each employee’s performance, potential and readiness for advancement while evaluating their potential for future roles. There are two primary parts to this process: skills gap analyses and employee development plans.

Skills gap analysis

A skills gap analysis involves evaluating employees’ existing skill sets and identifying areas where additional training or development is required. The process varies by role, but usually includes the following steps:

• Define the role. Clearly outline the skills, knowledge and abilities essential for key roles within your organization. To ensure your list is complete, consider asking for insights from current employees and collaborators and conducting a comprehensive job analysis and benchmark against industry standards.
• Assess current skills. Evaluate the skills and competencies of your employees to understand their capabilities. Use performance evaluations, skills assessments and feedback from managers and peers.
• Identify skill gaps. Compare employees’ abilities to the skills required for a role, and identify any gaps. That might include technical skills, leadership experience, soft skills and other competencies relevant to the position.
• Conduct development planning. Craft targeted development plans to address skill gaps and nurture talent effectively.
• Monitor and review. Continuously monitor employees’ progress to determine whether your development activities are effectively closing skills gaps.

Employee development plans

Implementing employee development plans can help you strategically nurture and enhance employees’ skills. Here’s how to use these plans to support succession planning:

• Goal setting: Employee development plans begin with a thorough assessment of individual strengths, weaknesses and career aspirations. This process can help you identify high-potential employees who might be suitable for future leadership roles.
• Skills enhancement: Look for ways to enhance essential skills and competencies required for leadership positions. Incorporate professional development opportunities, such as tailored training, mentorship, job rotations, stretch assignments and other enriching experiences, to facilitate skill acquisition and growth.
• Cross-functional exposure: Provide opportunities for employees to gain exposure to various functions and departments within your company. Cross-functional experiences broaden their understanding of the business and prepare them for promotion.
• Mentorship and coaching: Mentorship and coaching programs pair employees with seasoned leaders who can provide support and valuable insights. These programs typically foster personal relationships to support trust and collaboration in the workplace. They also support career development by creating transparent pathways for advancement and continuous learning.
• Stretch assignments: Challenging assignments and projects are a hallmark of effective development plans. Pushing employees to try new things and refine their skills can help prepare them for the demands of higher-level roles in succession scenarios.
• Feedback and performance reviews: Employee development plans should include regular feedback and performance reviews. They help you and the employee monitor progress, identify areas for improvement and measure alignment with succession goals.

Succession planning best practices

As you develop a succession plan, consider these best practices:

• Start as early as possible. Succession planning should begin well before key positions become vacant to ensure a smooth transition when the time comes.
• Focus on inclusion and belonging. Embrace inclusion and belonging in your succession planning efforts. Consider how employees come from a variety of backgrounds, experiences and perspectives that may drive innovation and resilience within your business.
• Regularly review and update the plan. Succession planning is an ongoing process. Review and update your plan at least once per year to reflect changes in business priorities and market conditions.
• Communicate transparently. Maintain transparent communication with employees about succession planning efforts. This can help create a culture where individuals understand their potential for growth within the company.
• Measure succession planning effectiveness. Establish metrics to track the success of your succession planning efforts. Utilize key indicators such as talent retention and promotion rates, and use leadership readiness assessments to gauge the impact of your strategies. Incorporate talent management strategies to further strengthen your succession planning process.
• Prepare for contingencies. Anticipate potential obstacles in your succession plan, and develop contingency plans to help you respond to unexpected events. For example, you might create a plan to guide succession if an executive decides to retire early. 
• Celebrate successes. When a succession plan helps you fill a position quickly, celebrate the success. This can help amplify the positive effects and highlight how succession planning supports employee retention.

Download our succession planning template

Succession planning is a proactive strategy for maintaining operational excellence. By identifying skills gaps and nurturing internal leadership candidates in advance, you can navigate challenging transitions without compromising performance or productivity. A succession planning template can provide a basic structure to help guide the process.

Indeed’s succession planning template is fully customizable, so you can adapt it for any type of succession planning. Download it today and start future-proofing your business.

Succession planning is an important element of your company’s long-term business strategy. By understanding your organization’s business needs, identifying critical positions and developing future leaders, you can reduce the risks associated with sudden departures and ensure business continuity.