What's the Definition of Succession Planning?

A few weeks ago I was a guest on a podcast and the host asked me the simplest of questions:
How do you simply define succession planning?

My response:
Having a pipeline of ready and capable future leaders, which sounds simple and succinct, right?

But the more I’ve reflected on it, the more I've realized that it's really a complex answer that needs unpacking.

What is a pipeline?
A pipeline means more than one person capable of advancing to a leadership position. In the case of succession planning a pipeline means having people who will have the skills your company will need in three years, five years, etc. [Check out this short video on the difference between future leaders and replacement leaders.]

A pipeline means you need to have depth (just picture a pipe – they are long!), not only more than one person, but also more than one generation. When you have multiple generations in the pipeline you have the luxury of slowly preparing future leaders as they work their way up the ladder, which saves you from having to hire leaders from outside the organization (an expensive and risky undertaking).

So a pipeline is more than one individual and more than one generation being prepared to be a potential successor.

Defining Capable and Ready
Most companies don’t think far enough ahead to define what will be needed from future leaders? You need to look at more than functional skills when hiring someone. Skills tell us about their functional prowess: What size budget did they manage? How many people did they manage? What kind of projects did they lead? But in the context of succession planning, you also want to consider their leadership qualifications: What is their belief system about developing others? How often do they provide feedback? What’s the biggest project they allowed one of their direct reports to lead, and how did it work out?

If you’d like 10 Questions to Ask When Interviewing for Leadership – click here.

How far in advance should you be preparing people? Best practice dictates looking ahead and preparing people for future roles 3, 5, and even 10 years in advance. If someone is promoted to a first-line supervisor today, how will you grow their skills and where will they be in three years, in five years? Where could they be in 10 years?

Example:
We just finished working with a client that has a headquarters in one state and offices in five other states. The company shared with us that they could be doing three times the revenue they are doing today if they had people to fill critical leadership roles in the “satellite” offices. (For example, the headquarters office provides environmental consulting, but only two of the five satellite offices do so as well because they do not have people to lead those service lines in the other three offices.) Because they didn’t prepare their own people to fill critical roles in those other states, their only option is to hire leaders from outside the company, but the right talent is hard to find – and expensive. Had they started developing future leaders 5 or 10 years ago, they would not find themselves in this money-losing dilemma. None of those 5 offices is living up to their potential.

Conclusion:
So ready and capable future leaders means to think ahead. Where do you want the company to be in five years and what leaders will you need in the pipeline today to achieve that future?

Success Story:

One of my SCORE clients runs a very successful cocktail bar with just two full-time employees. He is ready to hire a third employee - not because today's business demands it, but because his vision is to open an event space next door and he wants his current employees to be the people who will move over to lead the new facility. So we are constantly discussing - what skills will they need to be capable of managing their own team in the new facility? This small business owner is the perfect example of thinking ahead.

This article was originally published on LinkedIn.