Succession Planning Fit for a Queen – or any Leader
by StaffIASA
Marketing Communications,—
The passing of Queen Elizabeth II is a reminder to all of us on many fronts, but of particular importance to insurance companies perhaps is her intentionality and foresight to plan for this fateful moment that we will all face someday. Succession planning isn’t only important for the royals – organizations of all sizes, shapes, and types should have a sound plan in place for the inevitable moment a leader retires, resigns, is fired, passes away, or any of the other reasons a leadership transition may happen. And it’s not only important to have a succession plan for the leader at the top of the org (establishment, agency, or country). Good succession plans have contingency plans in place for leaders at all levels. Yet, an August 2021 study conducted by the Society for Human Resource Management found that 56 percent of respondent organizations don’t have a succession plan in place with only 21 percent stating their org had a formal plan. That’s a staggering statistic to know that more than half of the surveyed companies aren’t prepared for the worse-case scenario. Is your company willing to take this risk? Keep reading to explore a simple process to get you started.
1.Assess your talent blind spots
Don’t just plan for the departure of the top brass. Look at all positions in your organization and explore which ones do not have cross-trained talent or redundancies built-in to cover their responsibilities in their absence. If there’s a clear gap in talent coverage, especially for key positions, there’s a clear opportunity to address this role in your succession plans.
2.Stagger leader retirements
When possible, take a years-look-ahead in your succession planning efforts. Have one-on-one discussions with key talent that are approaching retirement career phases within the next ten years. Having a long-range view and plan is particularly important when you have multiple leaders retiring around the same time involving stock buybacks, buyouts, and large contract payouts. You may want to – as much as you can predict and control – stagger those talent departures to prevent large, multiple financial implications hitting the bottom line at the same time. These terms can be negotiated with senior leaders in their contracts well in advance.
3.Explore the talent pool
Sometimes, the candidate(s) you are looking for are internal and some are external. Internal candidates, especially those not recently functioning in a similar-level role, may need extensive training and corporate culture grooming to be able to take over for certain positions. Yet, they may still be the best candidate for the role you’re covering in the succession plan. This also requires a long lens, looking three to five or more years out, as the training process may be lengthy. Strategic knowledge sharing, client and project co-management, and other long-lead transition tasks are often at play.
4.Build the Bench
Succession planning isn’t a 1:1 solution. For every strategic role in your strategic plan, you should have several possible back-up talents ready to step into the role. You may find that as the training and development process progresses, some candidates may not fit in the role you are finding a suitable replacement for, and they evolve out of, drop out of, or are removed from the leadership training program. Having multiple candidates to select from when the time is right to replace key talent will ensure you have at least a strong – and the best — candidate ready to step-in.
5.Document the Plan
If it’s not in writing, it’s not worth having. Researching, documenting, and writing out a thorough succession plan is critical for many reasons. Handshake deals won’t work in this scenario. When a plan is in writing, decisions can be justified and recalled, others who weren’t in the planning process can determine the line of thinking at the time, and transitions into and out of roles are easily referenced in the event of questions. Well-documented succession plans can also serve as a compelling tool in an organization’s ESG (governance) strategy, which investors, banks, and other stakeholders look favorably on.
Ultimately, the time to put a succession plan in place for your organization is now. Don’t wait for signs of a departure worthy of the royal treatment. If you leave this article with any key takeaway, it’s this – time is of the essence. The future of your organization’s culture, business, bottom line, and reputation just may be at stake.