_edited.png){kind=small}
In today's fast-paced business environment, succession planning is vital for maintaining operational stability, reducing risks associated with leadership transitions, and ensuring long-term organisational success. By proactively developing internal talent, businesses can stay competitive, foster employee engagement, and respond effectively to changes in leadership or unforeseen departures. While over one-third of organisations in an HBR study reported not having a viable internal candidate who could immediately replace the CEO if the need arose, organisations with strong succession planning report 25% higher company valuations and investor returns
What is Succession Planning?
In its most traditional interpretation, succession planning is a strategic process that identifies and develops potential future leaders or senior managers within an organisation to fill key positions when they become vacant. This planning ensures the organisation continues to operate smoothly and effectively without interruption. It involves evaluating employees' skills, performance, and potential, and providing them with the training and experience necessary to prepare them for higher-level roles.
More broadly, succession planning plays a critical role in ensuring that key positions within an organisation are filled promptly by competent and well-prepared individuals, helping to maintain stability and consistency in leadership during transitions.
It also provides targeted development and training opportunities for high-potential employees, thereby enhancing the overall skill set and capabilities of the workforce. Additionally, succession planning increases employee engagement and motivation by offering clear career paths, which reduces turnover by demonstrating the organisation's commitment to employee growth and future development.
Increasingly, succession planning is being combined with employees’ career planning and opened up into a more inclusive, two-way, organisation-wide process that goes beyond senior or key roles, or high-potential talent. As a reflection of more inclusive definitions of talent, organisations pay attention to all talent in the organisation.
Why succession planning is important?
Succession planning is all about talent retention. Research consistently shows that employees are more inclined to stay with an organisation that visibly invests in their development. It's therefore an important part of an organisation's overall talent management approach which encompasses everything from recruitment, retention, development and progression.
Losing talent is costly. The replacement costs include recruitment costs and lost productivity. Being able to fill critical roles in your organisation with talent that you already know and value makes sense. However, it only works if your people are set up to succeed in those roles.
Effective development for your people must be part of any successful succession planning strategy. It will ensure you can build that all-important long-term talent pipeline. Without effective development, succession planning will never move beyond the planning stage. And when it comes to development, the key component is not workshops or training courses, it’s experience. It is therefore worrying that only 7% of organisations regard their leadership development programmes to be best in class in a recent study.
We all know that experience matters. We learn from our experiences. We develop new skills, learn from our missteps, and gain the confidence to be able to handle stretching roles. Any good succession planning activity should have experience at its core. Only if a promising employee has worked through a range of organisational challenges, will they be able to deal effectively with the scale and complexity of a new, or significantly different, position.
Learn more about the importance of experiential learning and how to introduce it in your leadership development initiatives read our handbook 9 Key Experiences to Develop Future-Ready Leaders.
Key reasons why organisations need succession planning
It pays off to be clear about the reasons why your organisation needs a new or updated succession planning process. This can help gain buy-in to your business case, during budgeting conversations or meetings with key stakeholders.
There are broadly 5 key reasons for focusing on succession planning. Often more than one reason is the key driver
1. Mitigating Risks and Ensuring Continuity:
Effective succession planning helps to manage the risk associated with key personnel leaving the organisation unexpectedly. It ensures that e qualified candidates are ready to step into key roles, minimising disruptions caused by such unexpected departures.
This also means that the organisation can preserve institutional knowledge by preparing successors who are familiar with the organisation's history, culture, and processes.
2. Being Future-Ready and Remaining Competitive :
Good succession planning processes mean that an organisation can proactively address potential skills gaps by identifying and preparing successors well in advance and providing training in skills that will become more important in future.
It also means that leadership and talent development can be aligned with the organisation’s long-term strategic goals, ensuring that future leaders are equipped to drive the organisation forward. This enhances the organisation's ability to adapt to changes and challenges in the business environment
3. Retaining Talent and Increasing Engagement 2-way career conversations engage employees by involving them in the succession planning process, making them feel valued and recognised for their potential. Furthermore, a good process provides clearer career pathways, motivating employees by showing them potential future roles within the organisation. As a result of the conversations, opportunities for advancement and professional growth are more likely to be offered which further increases employee engagement and retention.
4. Attracting Talent:
An effective succession planning process increases an organisation’s employer brand. It strengthens the organisation's reputation as an employer that invests in its people, making it more attractive to top talent.
5. Cost Efficiency:
Promoting talent from within is often more cost-effective than hiring externally, as it reduces recruitment and onboarding costs. It also offers smoother transitions, reducing the time new leaders take to become effective in their roles thus increasing productivity and therefore cost-effectiveness.
Download our Succession Planning Handbook for all the essential best practice information that you need to ensure your business makes the most of your talent.
Key Elements of the Succession Planning Process
Succession planning involves several key stages that help organisations identify and develop future leaders.
Define What Talent Means
The first step is defining what "talent" means in your organisation. Is it limited to high-performing employees, those in key or senior roles, or is every employee considered part of the talent pool? Once this definition is established, it’s essential to outline how talent will be assessed.
Performance
Performance is a critical variable to evaluate. Organisations should ask: how is performance assessed? Are employees only measured against KPIs, or do you also consider competencies within a specific capability framework? Additionally, is performance based on the latest appraisal, and how effective is the current appraisal system? Beyond performance, it's important to evaluate potential derailers, such as a lack of self-awareness, difficulties in interpersonal relationships, trouble adapting to new roles or teams, or a narrow functional orientation.
Potential
The second variable to assess is potential, which can be a challenging concept to define and is often misunderstood in organisations. It may be helpful to reframe potential through a growth mindset lens, focusing on an individual’s willingness and ability to learn and their readiness to apply that learning to new situations.
Motivation
Motivation is the third key factor. Does the employee show the desire to stretch into new roles or shift responsibilities? It’s important to determine if the timing is right for the employee to take on additional responsibilities or make a transition. Clearly defining what is meant by "stretch" and "shift" in terms of the extra time and energy involved is also crucial. Additionally, will employees have the opportunity to request another career conversation if their circumstances change?
Experience
Finally, experience plays a role in succession planning. Organisations should consider whether they require a minimum amount of time in a role or if there is a ‘time served’ element. They should also assess if there are specific experiences that employees must gain before progressing to new roles.
Each of these stages is vital to creating a robust succession plan that not only identifies future leaders but also supports their growth and development within the organisation.
Succession Planning Frameworks
The new, or updated, talent definition will then be codified in the succession planning framework which sets out what input data is collected and used to assess talent. It also indirectly sets out if succession planning is done by HR on behalf of employees or in conjunction with employees.
The 9-Box Grid
The 9-Box Grid has long been a favoured tool in talent management and succession planning, offering a visual framework that assesses employees based on two key dimensions: performance and potential. This 3x3 matrix allows organisations to categorise employees according to high, medium and low performance and the same for potential. This identifies high performers, spot development needs, and manages low performers.
Strengths and Limitations of the 9-Box Grid
Strengths:
Detailed Assessment: The 9-box grid provides a granular assessment of talent, with a straightforward visual format that helps management and HR professionals quickly discuss and compare employees across three levels of performance and potential.
Dual Focus on Performance and Potential: By evaluating both current performance and future potential, the grid helps identify employees who excel now and those with the capability to grow into leadership roles, enabling effective succession planning.
Guides Resource Allocation: The grid offers a useful framework for development decisions. High-potential employees are typically prioritised for leadership programmes, while employees in other boxes may be directed toward more self-directed development strategies.
Limitations:
Cumbersome: Assessments can be cumbersome and time-consuming as a decision has to be made about whether an individual is high, medium or low performance, and the same for potential. This often involves a lot of agonising over the right combination of performance x potential. .
Limited Dimensions: The 9-box grid simplifies talent into just two dimensions—performance and potential. However, employee engagement, cultural fit, or specialized skills may be equally important but are not captured within this model.
Static Representation: The grid offers a snapshot in time but does not account for the dynamic nature of employee performance and development. Without regular updates, it may become outdated, leading to inaccurate development strategies.
Overemphasis on High Potentials: There is a risk of over-focusing on high-potential employees while neglecting steady performers who are critical to daily operations but may not be categorized as future leaders.
The 4 Career Stages Model: A Dynamic Alternative
Given the limitations of the 9-box grid, some organisations are shifting towards a more dynamic approach that emphasises developmental stages rather than fixed categories. The 4 Career Stages Model provides a more flexible and development-focused framework. This model categorises employees based on their current career stage and helps organisations focus on moving individuals through the stages as they grow.
The four stages include:
Sustain: Employees in this stage are highly engaged, performing well, and primarily learning on the job. They may have found their "career sweet spot."
Support: These employees may be less engaged, experiencing a mismatch between reality and either their aspirations or the organisation’s needs. They may require targeted support to increase performance and engagement.
Stretch: Employees are performing at a high level in their roles and may be ready to take on additional challenges or new opportunities to push them out of their comfort zone.
Shift: High-performing employees with the potential and the readiness to take on a more senior role or a significantly different role.
Why Consider the 4 Career Stages Model?
The 4 Career Stages Model offers a simpler and more inclusive approach to talent management. At its core is the belief that everyone has talent, and the goal is to make the most of it. This model provides a straightforward, inclusive framework that acknowledges the dynamic nature of careers, recognising that they are always in flux. It promotes a two-way process, centred around open dialogue between employees and managers. Rather than relying on heavy talent categorisation or extensive data gathering, this model takes a lighter touch, focusing on turning conversations into concrete, meaningful development actions that help individuals grow and progress.
In conclusion, while the 9-Box Grid remains a valuable tool in many organisations, newer models like the 4 Career Stages offer a more inclusive and development-centric approach that aligns with the evolving, organisation-wide nature of talent management. By focusing on growth and continuous movement through career stages, organisations can build a more engaged and agile workforce, better prepared for future leadership roles.
Want to see the 4 career stages model in action and how it can transform your organisation’s succession planning? Book a free demo with us today
Implementation
Several factors need to be addressed to ensure that a new or updated succession planning process is in place. A structured approach to roles, responsibilities, and career development ensures that employees feel supported while managers and senior leaders actively contribute to the organisation's growth and success.
Roles & Responsibilities
In any organisation, it is crucial to define roles and responsibilities clearly to ensure effective talent conversations. Employees are responsible for owning their development, creating their career plan, and maintaining their Personal Development Plan (PDP). Line managers play an equally important role by conducting career conversations and creating development opportunities for their teams. Human Resources (HR) supports the overall process, providing guidance and challenging both line managers and managers to ensure continuous improvement. Senior leaders set the tone across the organisation by fostering a culture of growth and creating broader opportunities for development.
Career Conversations
Effective career conversations between line managers and employees are fundamental to a talent management process, especially a more inclusive, two-way process that actively involves all employees in the organisation. These conversations should be structured around four key areas. First, the goal-setting stage allows the employee to articulate their career aspirations. Next, the current reality is assessed using a framework such as the 4 Career Stages model or a 9-Box Grid, providing a clear understanding of where the employee currently stands. The conversation then moves to exploring options, identifying the development actions that make the most sense for the employee’s career progression. Finally, both parties commit to specific next steps to ensure the development actions are implemented.
To ensure both employees and managers get the most out of these conversations, training is essential. Employees should be trained on the process, the framework used, and how to prepare for and maximise the value of the conversation. Managers, in addition to receiving the same training, should also be skilled in conducting coaching conversations to better guide their teams.
Talent Reviews
Organising talent reviews is another key element in career development, primarily involving HR and senior leaders. HR is responsible for preparing the relevant data, aggregated from the completed career conversations and frameworks, and ensuring the appropriate individuals are involved in the discussions. HR also plays a critical role in helping senior leaders focus on relevant facts and in challenging any biases that may arise during the review, such as proximity, similarity, or experience biases. It is essential that all decisions are recorded, and followed up on, and that senior leaders commit to providing the necessary support for development.
Monitoring Progress
Finally, monitoring progress is vital to ensure ongoing success in career development. Line managers, HR, and senior leaders should work together to assess both the quantity and quality of PDPs and to hold ongoing development conversations. They should also create and support development opportunities across the organisation. Technology can be a valuable tool in tracking progress and reviewing succession planning processes, allowing HR to ensure that the organisation is consistently developing its talent pipeline.
Explore our unique approach to succession planning: https://www.talupp.com/succession-planning
Succession Planning Tools and Software
When implementing or updating a succession planning strategy, it’s worth considering talent management technology to create an engaging user experience and to streamline the collection, collation, and review of crucial data. However, not all technology solutions are created equal, and careful evaluation is essential. In many cases, less is more. It’s important to select a platform that delivers all the necessary features to support your new or refined succession planning approach, without overwhelming users with unnecessary complexity. The right technology can significantly enhance the effectiveness of your succession planning efforts while maintaining a user-friendly experience.
Overview of the best succession planning tools and software
Succession HR | Succession Now | Motivosity | SHL Talent Management | Talent guard | Cornerstone | Talupp | |
Employee Management | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | |
Organisational Charting | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ||
Applicant Tracking | ✔️ | ||||||
Talent Acquisition | ✔️ | ||||||
Succession Planning | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ |
Succession Management | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ |
Competency Management | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ |
Employee Profiles | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | |
What If Scenarios | ✔️ | ✔️ | |||||
Career Development | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ |
Succession planning is the strategic process of identifying and developing top performers and potential leaders to ensure they can fill vital roles within a company, maintaining competitiveness and continuity. Traditionally focused on top-level leadership, it now encompasses critical roles at all levels, including non-managerial positions requiring specific expertise. This process is usually more cost-effective when promoting internal candidates. Succession planning platforms enhance this process by streamlining talent identification, risk management, and development efforts, though organisations must avoid pitfalls like inconsistent implementation and neglecting diversity.
Each of these platforms offers unique strengths and weaknesses. Depending on your organisation's specific needs, budget, and existing HR infrastructure, one platform may be more suitable than the others. Talupp's unique approach and specialised 4 career stages model for succession planning can provide a competitive edge by offering a more advanced and tailored solution compared to these competitors.
Avoiding Common Mistakes in Succession Planning
Succession planning is essential for ensuring organisational continuity, maintaining competitiveness, and retaining talent. However, many succession planning efforts fail due to poor design or execution. These pitfalls can severely undermine the effectiveness of succession plans, leaving organisations vulnerable when key positions become vacant. Below are typical pitfalls in succession planning and ways to avoid them.
Focusing Only on C-Suite Positions
Many organisations concentrate solely on succession planning for top executive roles, neglecting other critical positions across various levels. To avoid this, succession planning should encompass key roles at all levels, not just the C-suite. Identifying roles that are critical to operations, innovation, or customer relationships ensures a broader approach to talent development, making the organisation more resilient. In increasing numbers of organizations, talent management now includes everyone in the organisation, as a reflection of inclusive definitions of talent.
Ignoring Diversity and Inclusion
Neglecting diversity in succession planning can result in a homogenous talent pool, which limits perspectives and stifles innovation. It is crucial to actively integrate diversity and inclusion into the succession process. By ensuring the talent pool includes individuals from diverse backgrounds and the selection process is free from bias, organisations can foster a more innovative and inclusive talent pipeline.
Lack of Transparency and Communication
Keeping succession plans secret can breed uncertainty and reduce employee engagement, as potential successors may be unaware of their career trajectory. To counter this, organisations should communicate openly with potential successors about their development paths and what is expected of them. Transparency builds trust and motivates employees to invest in their personal and professional growth.
Relying Solely on Tenure and Performance
Basing promotions solely on tenure or current performance risks overlooking a candidate’s leadership potential and future readiness. Instead, employees are assessed using a combination of factors, such as performance (both what was delivered and how it was delivered), potential, motivation, and experience. Tools like 360-degree feedback and behavioural assessments can provide a more comprehensive view of each candidate’s suitability for future roles.
Underestimating the Importance of Development
Identifying talent without offering adequate development opportunities leaves them unprepared for career moves and future opportunities. Organisations should implement personalised development plans that include stretch assignments, mentoring, coaching, and formal training. These development opportunities ensure that potential successors are equipped with the necessary skills to thrive in their future roles.
Infrequent or Inconsistent Reviews
Succession planning is often treated as a one-off event, which can lead to outdated plans that no longer meet the organisation’s needs. To avoid this, succession plans must be regularly reviewed and updated in line with changes in the business environment, organisational strategy, and individual progress. Making succession planning a dynamic, evolving process keeps it aligned with the organisation's future needs.
By addressing these common pitfalls, organisations can strengthen their succession planning efforts, ensuring they are better prepared for the future and capable of maintaining stability and growth even during leadership transitions.
Learn why succession planning is a path to retention success beyond C-Suite: Read here
Case Study - From outdated 9 Box Grid to inclusive 4 Career Stages Framework
Informa is a leading international events, digital services and academic knowledge group. A member of FTSE 100 with 11,000 colleagues working in more than 30 countries, it undertakes extensive HR activities.
In late 2022, Informa started working with Talupp. Initially, the work focused on a talent management model and then expanded to include a leadership framework. In this case study, Petra Edwards, Head of Talent, Leadership and Inclusion at Informa, outlines what prompted the engagement with Talupp and explains the transformative impact the new approaches have had.
The challenge
Like many organisations, Informa had been using a 9 Box Grid to segment employees. The nine boxes are based on two dimensions – performance and potential. However, it did not quite meet Informa’s needs.
“The 9 Box Grid wasn’t quite working for us,” explained Petra Edwards. “Our company had been using it on and off, but the process we applied proved cumbersome in the collection and difficult in calibration. As a result, it was difficult to scale and we only applied it to the top one to five per cent of our people. Even then, we didn’t seem to have sufficient time to calibrate the data so ended up staying away from using it for insights or succession planning, rendering the approach dysfunctional in use.
The solution
Talupp’s 4 Career Stages Framework
Instead of categorising talent according to their potential and performance. Talupp’s approach focuses on the concept of a journey with four stages. This avoids boxing people in and enables them to grow and move.
For each client, Talupp adapts the model to client needs, and undertakes co-design workshops and a review of existing HR and talent processes to adapt its framework to ensure it fits that client organisation perfectly. In Informa’s case, this included integration with existing performance management and promotion processes.
Four-stage framework implementation
The project to move from the 9 Box Grid to the Talupp 4 Career Stages Framework started in one division of Informa – Informa Connect. At the time, 1,200 colleagues were the initial targets for the new approach. Since then, the division has expanded and 2,000 people will be privy to this new approach, as the early adopters.
With the help of Petra’s internal showcasing efforts, most of the other divisions of this 12,000 people strong global business have now signed up to roll out this approach over the next 1-2 years and Informa Group is using the career stages as part of its annual 1% top leadership assessment.
“Although we were starting the rollout in Informa Connect, we always planned for the new process to be adaptable across the whole of Informa,” explained Petra. “The impact is much bigger on internal mobility if we can spread that approach across everyone. To that end, we kept all other HRDs in the business fully informed of the process.
Read the full case study here: https://www.talupp.com/informa
FAQs
1. What is succession planning, and why is it important?
Traditionally, succession planning focuses on identifying and developing potential future leaders or key personnel for senior roles, often using tools like the 9-box grid to assess leadership potential and performance. It ensures that critical leadership positions are filled with prepared individuals, minimising disruption during transitions. In contrast, a more modern, inclusive approach broadens the scope, focusing on all employees, not just senior roles, and fostering a lighter, dialogue-based framework that encourages ongoing career development for everyone.
2. How does succession planning benefit an organisation?
In a traditional model, succession planning benefits the organisation by ensuring that there’s a pipeline of talent ready to step into senior roles, reducing downtime and risk during leadership transitions. However, in a more modern approach, the benefits extend across the organisation, promoting engagement and development at all levels. This lighter approach helps all employees feel invested in, not just high-potential leaders, turning conversations into concrete development actions that benefit the entire workforce.
3. Who should be involved in the succession planning process?
Succession planning should involve senior leadership, HR experts, and department heads, but most importantly, it should centre around dialogue with employees. This two-way process encourages transparency, aligns employee development with organisational needs, and fosters a culture where everyone’s talent is recognised and nurtured, regardless of their current position.
4. Can succession planning be applied to non-leadership roles?
Absolutely. In line with a more inclusive approach to talent, succession planning can be applied across the organisation, even in non-leadership roles. This inclusive framework acknowledges that all employees have potential, and it’s about making the most of their talents. Ensuring continuity in specialist or critical roles can be just as valuable as preparing for leadership transitions.
5. How often should succession plans be reviewed or updated?
Succession plans should be regularly revisited, ideally at least annually, but the review process can be more dynamic, depending on the organisation’s structure or external factors. Given that careers and roles are in constant flux, this lighter framework promotes regular, meaningful conversations, allowing for flexibility and adaptation as business needs or employee aspirations evolve.
6. What is the difference between succession planning and replacement planning?
Succession planning is forward-looking and focuses on developing internal talent through structured career development conversations. It’s about long-term growth and preparing employees for future roles. On the other hand, replacement planning is more reactive, focused on quickly filling a vacancy when it occurs. Succession planning fits within a broader strategy of inclusive talent management, where the goal is continuous development rather than simply plugging gaps.
7. How can succession planning help improve employee retention and engagement?
By turning career conversations into actionable development plans, succession planning helps employees see clear paths for growth within the organisation. When employees feel their talents are recognised and there are meaningful steps towards their progression, engagement increases, and they are more likely to stay. This lighter, more flexible approach avoids heavy categorisation and focuses on dialogue, which in turn fosters a deeper connection between the employee and the organisation.
8. How does succession planning align with talent development and career management?
Succession planning aligns seamlessly with talent development through its focus on dynamic and meaningful career conversations. It uses a two-way process to identify potential and align it with the organisation’s needs. This approach isn’t rigid but instead adaptable, making the development process more fluid and relevant to the individual’s evolving career stage, and providing a pathway for concrete development actions.
9. What tools or software can be used for succession planning?
While the focus is on creating a more dynamic and dialogue-centred approach, tools can still be used to support this process. Platforms that enable lighter touch data collection and help track progress and talent development can be useful, as long as they align with the principle of fostering meaningful conversations. The tools should support, rather than drive, the process—allowing for flexibility and personalisation.
10. How do we identify high-potential employees for succession planning?
In traditional succession planning, high-potential employees are often identified through the 9-box grid, which evaluates individuals based on their current performance and future leadership potential. Senior leaders and HR use this data to target individuals for succession into critical roles. In the more inclusive approach, identifying high-potential employees is a more fluid process, driven by continuous dialogue and regular career development conversations. The emphasis is not solely on leadership potential but also on each individual’s ability to grow and contribute to the organisation in meaningful ways, whether in leadership or specialist roles.
Comments