Is your business ready for a management or leadership transition? If your operations manager resigned tomorrow, would you have a plan – or would you be scrambling? And lastly, what’s stopping you from getting started?
If you’d feel unprepared, you’re not alone. Only 35% of organizations have a succession plan in place for their critical roles. But with the right approach, you can ensure your business is prepared for the future, without the panic.
“Don’t let not having all the answers deter you from getting started on building a succession plan,” says Jim Rein, Next Gen business advisor. “Tackle what you can a chunk at a time and enlist the help of third parties to help you through the tough spots. Having even a partial plan will always serve you better in the long term than facing the detriments of having nothing in place.”
Pinion advisors suggest implementing these best practices to begin to build a strong, sustainable succession plan:
1. Start the conversation EARLY. Succession planning takes time, especially for specialized, technical, or senior roles. It can take 12-24 months (or more) to properly train and transition someone. Don’t leave plans to the final three months – aim to start around two years before an anticipated transition.
2. Build the bench. Identify key roles and potential successors. Outline the skills, experience, and training needed for each role, especially those held by individuals nearing retirement. A strong bench ensures continuity and reduces your risk.
3. Create a realistic timeline. Break the process down to a granular level with clear stages: training, mentoring, shadowing, and handoff. Assign clear milestones and deadlines to keep the plan on track.
4. Write a risk management plan. What if someone leaves unexpectedly? Lay out emergency protocols and interim leadership plans to keep business moving forward.
5. Bring in a third party (if needed). A neutral, third-party consultant can offer objectivity and experience to help navigate sensitive dynamics or tough conversations.
6. Document institutional knowledge. Encourage current leaders to record their processes, contacts, and even lessons they’ve learned. This knowledge transfer helps successors ramp up faster and reduces the chance of critical information getting lost in transition.
7. Gather feedback from all directions. Every few months, take a pulse check with everyone involved. Are expectations being met? Are things moving in the right direction? Honest, regular feedback can help you course correct along the way.
8. Focus on progress over perfection. Transitions are never going to be perfect. There will be learning curves and minor setbacks. The goal is steady progress, not perfection.
9. Measure and adjust. Establish clear KPIs or success metrics such as readiness levels, succession coverage ratios and time-to-fill for leadership roles.
10. Celebrate the wins. Succession planning is a journey, not a destination. Celebrate milestones, like a successful training or a new leader stepping up, to maintain momentum and morale.
Common Succession Planning FAQs
Q: “How far in advance should you start succession planning?”
A: Ideally, begin planning 12–24 months before an anticipated transition, especially for specialized or senior roles.
Q: “What roles should be included in a succession plan?”
A: Focus on key leadership and management roles, especially those critical to operations or held by individuals who are nearing retirement.
Q: “How do you determine what skills are needed for a position?”
A: Start by outlining the core responsibilities of the role. Ask:
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- What are the day-to-day responsibilities?
- What strategic goals is this role responsible for?
These questions help clarify the skills, knowledge and experience required for success. It’s important to recognize that the skills needed for the future may differ from those of the predecessor.
Q: “How can we prepare successors effectively?”
A: Develop structured training programs, establish mentorships opportunities, and plan gradual handoffs of key responsibilities. As mentioned previously, encourage current leaders to document their processes, insights, and lessons learned to pass on knowledge and culture to the next generation.
Q: “What metrics can help measure progress?”
A: Here are some insightful KPIs to track:
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- Time to fill leadership roles
- Percentage of open roles with identified successors
- Number of successful internal promotions
- Risk of leadership loss
- Succession coverage ratio
- Successor readiness levels
- Rate of internal promotions
- Successor retention rate
- Strength of the leadership pipeline
- Participation in development activities
The hardest part? Getting started. Are you prepared for the transitions ahead for you and your business? Connect with a Pinion Next Gen advisor for guidance with your succession planning journey, to align your business direction, and keep your organization moving forward with confidence.
