Human Resources, Small Business Spoonfuls Podcast

SBS 229: The Importance of a Good Succession Plan

Hey Compliance Warriors!

We talk today about why organized succession plans are so good for an organization!

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Enjoy and until next time, Be Audit Secure!


Lisa: In today’s episode we are talking about succession planning.


Mason: Yep. We’re talking about the leaders of tomorrow.


Lisa: That’s right. So large businesses like really large businesses normally have good succession planning in place. But our average member that we deal with, our average business is less than 500 employees. A lot of them have less than 250, and sometimes even in businesses of this size, they don’t think about what happens if a key person leaves expectedly or unexpectedly. What if someone passes away unexpectedly Like who’s Gonna run the show?


Mason: We’re Gonna talk about, how your organization can develop a good succession plan and, some different tips to think about in this aspect.


Lisa: Yeah and so we’re taking these tips from, an article by Dori Meinert, written in the HR magazine. So this is kind of where we’re getting all of this. This is really her tips, but I think, she makes a lot of good points here.


Mason: Yeah, and succession plans it’s a widely known thing. I mean everybody, a lot of different organizations have succession plans in place anywhere from, like Google to sports teams to different things. So, there’s a lot of organizations that view this as a very important thing.


Lisa: Yeah, And I want to just point out a study here that was done in 2017 that talked about which organizations are most likely to have succession plans. And it showed that only 43% of organizations had plans in 2016. And so, the positions that were planned for were largely executive team and senior management positions that then when it got down to middle management, that was cut in half again. We’re not really planning like we should be. And even at the executive team level, 79% what happens to that other, 21%. So, like this really a hot topic we need to address that sometimes gets left in the dust because we have that mentality of Oh well we can do that tomorrow.


Mason: Yeah, exactly. And even at the lower grade positions, individual contributor, it’s a 17% here and there’s different tiers of importance and things like that, but who’s going to take that place when that person moves up, and kind of thing. So, it just can be a vicious cycle if you’re not prepared for it.


Lisa: Yeah, absolutely. Let’s look at these 10 tips.


Mason: Okay, sounds good. The first one is ask leaders to identify future needs.


Lisa: This is where we have to kind of like have a foresight into what’s going to be coming on. But ask the leaders, what are we going to need tomorrow to meet our business goals Where are the gaps between skills in the current talent pool and skills that will be required in the future line we want to make sure that we are establishing credibility by putting current leaders wishes first and letting them know, that your expertise, is critical, but it doesn’t matter unless you’re working toward meeting the needs that are today and tomorrow. So, this is like a really futuristic look as to what we’re going to need. Like for instance, if 10 years ago someone had said, well, we just really need to have someone who understands how to load a CD ROM and execute a program. Okay, where would they be today Because most computers don’t even have CD ROMs. You know, like that’s a very silly, simplistic example. But just think about that. Like today is not tomorrow.


Mason: Everything’s always evolving and changing within an organization. The next point is Agree on a clear definition of a successful leader.


Lisa: And sometimes we just rely on a job description and we just say, well we want to get someone who can do this job and who may be has this education or whatever, but we want to look at, instead of looking all of that, we want to see a success profile. We want to know what skill sets are going to be needed to succeed no matter what. Some of the other things may say as far as education, everything, which, people are going to be those high potential leaders for the future.


Mason: Having a formal succession plan can help create a more objective process. It’s out there and when you think about that word objective, that means you have an object in mind of what you’re trying to reach the goal in effect. Having that clear definition of so everybody’s in an understanding of what that objective is. So, define the goal and select the appropriate data to use.


Lisa: This is kind of a simple one, but once you have your goal defined, then the data can help you further  define and identify skills gaps and growth needs in your current workforce so that you can develop training programs that would better support development toward these objectives for the future.


Mason: So that’s a shorter one. The next one is important to identify possible future leaders.


Lisa: Well, yeah, and kind of, this is what we’re talking about the whole way, but now we’re sort of just getting down to that fact of some employers prefer to avoid this term high potential because it can make other employees feel inferior but. If you think about categorizing workers as early career, mid-career, senior career, then you can plan their development opportunities. You can build this ladder, if you will, to advance their career. And when you think about that ladder, it involves training and development of those individuals, but you’re training them to climb up to eventually succeed that person above them.


Mason: I mean, people start in mail rooms all the time and I mean, it can start as small as it can be, but if you see a potential in that person, you can in-house train them and have them for years to come into this, ultimate person that you’ve built and you’ve created for your company culture.


Lisa: Yeah.  And the other thing too is to remember that some employers shy away from this because they say, well, what if I spend all of this time developing them and training them and then they just leave and go somewhere else. Well, the scary part really is what if you don’t spend the time and they stay and then it’s sort of like you owe them this position that they’re not qualified for.


Mason: Yeah, that’s right. And so, it’s kind of a tedious balance there of not putting too much pressure on a person, but also developing your employees well And then that goes back into some former podcast we’ve had about retention rate and things like that. And if you make sure you’re on top of your retention rate and treating people right, people will stick around anyway. The next part is keep it simple, which is just good in all aspects.


Lisa: Yeah. I mean, you can get all insane with, diagrams and grids and calculations and algorithms and everything. But really, just looking at performance expectations, executives are busy, they’re going to disengage if the process is too complicated. So, instead of like using a nine box method, the writer here egg, use an example of maybe a simpler four box grid that the bottom line is, don’t try to over complicate it because if you do, your succession plan is going to be so laden with details that it’s not going to work.


Mason: Yeah. And what if the person who puts that succession plan in place, is gone and they’re the only one knows how to work it, then you’re back to square one and how it operates. So that’s just a good, thing to always keep it simple and so everybody can really understand what’s going on. And you don’t put so much pressure on a situation where you’re always focused on that succession plan. Your just kind of in overtime building it up. So, develop an action plan.


Lisa: So, this has got to have three characteristics or three elements. It’s got to be visible, measurable and shared. If you have an action plan that nobody can see or talk about and that you don’t measure so that we know when we get to our goal, does it work, are we meeting our steps here, then it’s not going to work out for you. So you want to really sit down and you want to have something that’s simple but you want to make sure that there are our checkpoints where you’re pairing each person, maybe with the senior mentor to encourage knowledge sharing or whatever this action plan is that it’s moving toward this ultimate goal of having people prepared to take the next step.


Mason: If you have those kinds of things in place, it’s going to be really organized. I know that I’m more of a visual kind of goal-oriented person and developing an action plan for anything that I can see. I put them on my wall, there’s one on behind me right now, kind of thing of you can see a plan in place and you can see those steps kind of take action and you can refer back to it to be like, okay, what do we need to do next with this person. The next part is start small.


Lisa: Just kind of back to basics here, like we always say in football analogies, five yards at a time, just get the next five yards, the next five yards. Five all day. So, kind of look at what the succession plan is going to look like. Create a proposal, show how it’s going to benefit the organization. You could get a little bit of push-back in the beginning, from your executives. If you’re not making it clear and simple and it’s, not just step by step, you will overwhelm them because they’re already busy. And if you want them to take you seriously in HR when you’re very first putting this together, then you do want it to have those five all day kind of attitude.


Mason: Yeah. And I liked the point here. It brings out establish a pilot program. Something you can kind of fly before you take off, like all that kind of stuff. So, you can kind of work out the kinks before it really becomes too serious. The next one would be, be transparent.


Lisa: Don’t hide, let employees know that they’re being developed for higher positions. That’s going to give them confidence. If you don’t give them career development opportunities, they may feel ignored and leave. And we know that’s like with the big, large millennial workforce that we have it, this is one thing they demand. So yeah, don’t like hide behind this. It’s nothing to be ashamed.


Mason: Be transparent and that’s going to help you build better leaders because people who can’t handle the pressure are going to cower and go away from the position. And then you’re really going to see you a true person is and it gives them time to really develop in their mind if they’re not 100% confident it, it’s like, okay, I’m going to take this by the horns and I’m going to grow in this kind of thing instead of just like, 20 years down the line it’s like, okay, well they retired and we’ve been grooming you all this time, we just haven’t told you and here you go. You know, and then they’re overwhelmed with pressure. So anyway, the next point is create a positive perception.


Lisa: When you hear the term succession plan, you can think of a negative way to view that. It could have negative connotations if they’ve only heard it used when someone is getting fired, and so that’s not what we want to do. We want to move the business forward. And so, this is for the growth of the organization and opportunity for staff who demonstrate dedication and of course proficiency.


Mason: A good point right out here is help employees understand that a succession plan isn’t only about filling sudden gaps. That just produces, we’re like going back to that culture, a good culture. Update the plan regularly.


Lisa: You want to have regular conversations with the leaders, the leadership about their roles and maybe they are doing things differently than they were last year. And so, you want to modify your succession plan so that these changes are in the formal data and when you share the progress and challenges with leaders, that you’re having, do this on like a quarterly basis and make sure that the succession plan is not something you create once and then everybody kind of forgets to do it.


Mason: You have two meetings about it and then it just goes away type of thing. It says there in the end, carefully crafted succession plan will not only help you prepare for the future, we’ll also help you engage and retain top performers in the present and just updating the plan regularly in the workforce as we know people come and go. And so, if you’re keeping an eye on that and like, Oh, I have this person in my succession plan, but now they’re gone. You can identify somebody who’s similar to those qualities that you’re looking at.


Lisa: Exactly. it’s a living, breathing plan. It doesn’t just sit on a shelf.


Mason: All kinds of companies use it. It doesn’t matter what kind of company you are, if you’re a growing or if you’re a lasting company a long time, this is a necessity.


Lisa: Well, and yeah, and even like for us, we’re not a huge company. I mean, we handle a lot of clients, but we do it with a relatively small force. But, even us, we talk about succession planning. It’s for everyone.


Mason: Yup. Okay. Well great. This is some good 10 tips to remember. And moving on here.


Lisa: Until we talk to you next time, Be Audit Secure.

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