Succession Planning in Business, the Smart Way

succession planning template

7 Steps to Organizational Preservation


Though it is far more common than we would like to admit, our businesses and organizations are filled with what I like to call “single persons of failure,” or SPOF.  In my company, for example, we have a department manager who is nearing retirement in the next 18 months, yet we have no one identified as his potential successor or anyone shadowing him to learn all that he knows, for that matter.  It’s as if we don’t want to imagine or don’t want to think about what happens when Robert leaves the company after 30 years of dedication.  While there are a number of succession planning methods and templates out there, the most important part of the process for business leaders is simply to talk about it.

To put it into context, SPOF is not limited to only those with decades of experience who may be retiring.  Though we want to hold on to our employees, who is to say someone with specialized skills, knowledge or authority may just up and quit someday to pursue another career?  It happens more often than you’d think.  As business leaders, we need to be prepared for such events to ensure the healthy continuity of our businesses and organizations.

Fortunately, succession planning is not hard, nor does not have to be complicated; but it is extremely important.  Because they serve as your organizational ‘contingency plans,’ succession plans for employees should be something that are talked about with your senior managers periodically.  Formally conducting these conversations with a cross functional team is often best, as you are likely to obtain a diverse set of feedback on the various individuals you discuss.  Moreover, good succession planning is really about keeping a watchful eye on your business and your people at all times to make sure you have arrangements to keep your company moving smoothly going forward.

Here are the 7 steps to building a solid succession plan for your business:

Step 1.  Set Aside Time to Talk Succession Planning

The first step in effective succession planning is to simply set aside the time to focus on it.  In my firm, we dedicate one day every year to talk about staff succession plans.  Sitting down with your senior managers and the various leaders in your organization once a year can make a world of difference should someone exit the business.  These plans also help managers outline training needs for the organization for the year to come.  For larger businesses, succession planning conversations should be done by function, by division, by office location, etc., such that you have the right people in the room.  Imagine just the CEO, CFO and CTO doing this for a 20,000 person corporation!  Build succession planning meetings into your annual business operating cycle.

Step 2: Create a Success Planning Template

To get the most out of your time with the team, create a simple template that you can use to organize thoughts and names of personnel.  We have created one that you can download HERE on our Tools and Templates Page.  They key to a good succession planning template is that it should be simple, it should visually tell you where you have issues, and it should be something that you can easily draw up to help you should an employee depart your business.

Step 3: Outline Critical Roles, Skills and People

The next step in the succession planning process is to outline critical roles, personnel and skills in your organization.  Examples of SPOFs might include: all supervisory positions, support roles for business audits (people who are dedicated to maintaining the company’s compliance with laws and certifications), highly experienced employees or specialists, and employees with special access, such at IT personnel.  Simply put, as you look around your organization if the thought of a certain person leaving today makes you very uncomfortable, their name should appear on the list!

Step 4: Looking at the Future of Your Business

When it comes to selecting people to list as possible successors, identify the names of other potential candidates for that position who are elsewhere in your company.  The key here is to try to answer YES to the following three questions:

  1. Would this person be able to do this job, with the right preparation?
  2. Would this person want this job, with the right preparation?
  3. Would this job align with the individual’s longer term career goals?

Don’t worry if the potential successor is not ready for that responsibility.  The list will give you an idea of who might be able to step into that role with the proper development.  There is a key point here though that we must highlight: if the answer to Questions 2 or 3 is a strong “No,” you should only identify that person as a possible successor on an interim basis.  You should never list an employee as someone’s successor if there is a conflict with the person’s personal or career interests.  For instance, if an employee has little kids at home and does not want to travel, listing he or she as a successor to the Sales Manager who spends 300 days a year on the road is not a good idea!


succession planning template for business pdf

A Sample Success Planning Template


In the example template shown here, we have outlined the critical roles along the top, and listed the potential future candidates below each one.  We have also organized the names of potential successors according to when they might be ready to take that position.  This level of detail helps you establish development plans for individuals listed as potential successors.

Step 5: Look for Trends on Your Template

Once you have gone through the succession planning exercise and have a list of names compiled, look for any trends or issues.  In the sample we show above, for instance, there are no candidates ready to take the Quality Manager’s job today, if Mary Watson leaves.  Also, Bob, Wendy and Nicole show up more than once, suggesting they are high valued employees.  Having sat through a number of succession planning events, you will find that certain names of high valued employees show up often because they are very capable.  And you will find that there are certain roles in your business where there are very few potential successors who could be identified.

Step 6: Define Development Plans According the Succession Plan

Your succession plan should drive action.  That is, addressing the trends and information you discern from the exercise – filling in holes, developing certain people for certain roles, etc. – should be a key area of focus for you and your management team over the coming year.  For instance, in the example above, the individuals most likely to want take the Quality Manager’s job at some point down the line should be given more challenging assignments to prepare them for such a position.  Additionally, Bob’s manager should have conversations about his potential interest in going into production, or towards the technology side of the business.  One on One meetings are the best time for these discussions to take place.

RELATED: 5 Things You Can Do TODAY to Be a Better Manager

Step 7: Remain Vigilant Until the Next Succession Planning Session

To make for easy and effective succession planning each year managers need to remain vigilant about what’s going on in their business.  For example, if an employee expresses interest in taking a certain position at some point in the future, make note of it.  Equally, if someone begins to express dissatisfaction with the direction your business is going, you may need to be on the lookout for someone to replace them should they leave.  Having details and knowing the direction where you employees may be headed is crucial to setting up long-term succession plans.  So while there may just be a single day set aside for the formal conversations each year, effective succession planning should really be an ongoing activity for you and your managers.

Looking for more? 

When is the last time you conducted a SWOT analysis of your company?

How partnerships can help you grow a small business


One comment

Leave a Reply

Your email address will not be published. Required fields are marked *