As an increasing number of senior executives around the globe near retirement age, many corporations are facing the challenge of finding a successor to take over leadership of the company. Succession planning programs are being implemented to help ensure that managers and employees are prepared for their eventual transition into leadership roles.
According to AME Info, having a succession planning process in place leads to increased employee morale because it involves targeting a group of employees for future career advancement. The effort required to establish a development program for these future leaders results in a boost of confidence, which helps to motivate them and ensure that they will be capable of stepping into these new workplace roles when the need actually arises.
Succession planning procedures can also boost consumer confidence and retention. By assuring clients that the transition in power is an ongoing and well-thought-out process, it assuages their fear of a radical change in policies and procedures. It also allows them to become accustomed to the idea of change and affords them the opportunity to begin working with the group of potential future leaders before the change in power takes place. According to M. Shyam Kumar, chief executive officer at Technoforte Software, clients want to "avoid a situation of criticality which affects their business due to key professionals leaving the service providers."
Succession planning programs save organizations on the costs associated with recruiting and hiring a corporate outsider. In addition, the learning curve necessary to get new employees up-to-speed on corporate procedures and culture typically slows down a business, resulting in a dip in productivity, and possibly revenues, during that time frame.
One of the greatest risks involved in corporate succession planning programs is the chance that the individuals who have been groomed to step into leadership roles in the future may be tempted to bring their new skills to a competing organization. According to Business Know How, another pitfall of succession planning is the inadvertent selection of inappropriate and unmotivated people for inclusion in the succession plan.
Implementing a succession planning program that is not specifically tailored to the needs of the employees involved in the training and the anticipated future needs of the corporation simply wastes resources. Although there are certain steps in succession planning that may be applicable to many corporations, such as having managers shadow top leaders to learn about their daily challenges, a plan that works well for one company may be completely ineffectual in another.