Businesses use succession planning more commonly today than in the past. This planning allows leaders to identify and coach those who may succeed them in the organization. Once identified, selected individuals get extra training and development that will help them to move into the new role. When done well, this can deliver a seamless transition from one leader to the next. However, there are disadvantages to succession planning that leaders should note.
Succession planning allows leaders to focus on potential new managers who are employed by the organization but does not allow for candidates outside the company. In many cases, managers will consider only their direct reports as potential successors. This is good in terms of career development for those inside the organization, but it does not necessarily meet the company´s best interests. In some situations, it is better to replace a manager with an external candidate to bring new skills to the team. Other times, there simply may not be a suitable candidate within the organization.
Negative Effects on Motivation
It is not always totally clear cut whom a manager should prime for future leadership. In some cases, there may be two or more strong candidates for the role. If leaders do not handle succession planning carefully and objectively, others may see the person being trained for leadership as favored. This can lead to motivated individuals losing interest and not trying as hard in the work place. It may have the effect of making those employees think it is not worth their effort if there are no progression possibilities. Managers need to carry out succession planning carefully to avoid motivational issues.
In small, family-run businesses, succession is an issue that is very important. It the head of the organization dies, a child will replace that person in many situations. If the parent favors one child over another and if this is not considered to be fair, it can have a catastrophic effect on the small company. Family rivalries can cause a business to fall apart if not addressed effectively.
Organizational Structure Changes
Succession planning sometimes takes place even though an organization's structure may not be completely stable. Leaders need to develop and change organizations so they can survive to meet new business challenges. Sometimes a person may be developed for a role in the organization that may not exist in the future. This can have a negative impact on motivation of the earmarked individual. In addition to this, training costs money. If the company's leadership later eliminates the position, it will have wasted resources developing a person for a role that no longer is needed.