Succession Planning: Set Your Organization Up for Success

Having a successor lined up for critical roles is key to business success. With a well-planned succession program, HR leaders can help their organizations maintain continuity during leadership transitions.

“Succession planning is recognizing the talent we have today and where the organization needs to be in the future,” said Prudence Pitter, global head of HR for Amazon Web Services’ automotive, manufacturing, health care and life sciences division, speaking April 16 at the SHRM Talent Conference & Expo 2024 (Talent 2024). 

Pitter outlined how HR can create succession planning aligned with the organization, gain buy-in from the executive team and identify successors.

In a SHRM survey, only 21 percent of HR professionals said their organization had a formal succession plan in place, while 24 percent had an informal plan. More than half of those surveyed (56 percent) reported that their organization didn’t have a succession plan in place at all. The main reason why was a lack of time and resources to create one.

Obstacles to Succession Planning

Pitter said that some other common roadblocks to succession planning include a lack of executive buy-in, outgoing leaders being uncomfortable with planning for a successor, and not adequately preparing the next generation of leaders.

“Some business leaders are reluctant to leave the organization and want to control their legacy,” Pitter said. “They’re also concerned the transition will be immediate. Leaders may assume that the succession conversation is being held with an exit date already in mind, but succession plans are usually two years or more away.”

The leaders who are typically in the succession plan also tend to be the busiest, and their day-to-day priorities take precedence over succession, she said.

“HR must find a way to help them understand why it’s important,” Pitter said.

Leaders may also recognize that they’ve failed to develop viable successors. “This is where HR adds value in assessing bench strength,” Pitter said. “To identify a leader, you need to be able to identify and track them as a leader for a full business cycle, recognize any skills gaps and put a plan in place to make sure they are ready for that next role.”

It’s a process that can take years.

“It’s important to recognize any gaps in leadership on the bench,” she said. “On the other hand, if the outgoing leader is recommending someone as a successor and you know that person’s results are not great, you want to make sure that is visible to decision-makers.” 

Pitter said that the best succession plans include a clear assessment of the capabilities of the current leadership team and how they have been performing over the past two years. They also include publicly available data for leaders in other organizations in the same or similar industries.

Crafting a Plan

One way to gain succession planning buy-in from the executive team is to ensure your plan is developed specifically for and aligned with the organization, Pitter said.

Start with one leader and one role if resources and bandwidth are limited, she said.

“As you are creating a plan, focus on leadership development capabilities that are available to the organization, because once you get buy-in from leaders, you want to make sure you are delivering results,” Pitter said.

The performance management process is critical to assessing talent.

“If you don’t have a performance management process that uses metrics on how leaders are performing today and what the potential for performance is in the future, it’s going to be difficult to make the case to leaders who are not bought in to succession planning,” Pitter said. “Who are the leaders who have performed at or above expectations over a certain period of time? How does their performance line up with the growth of the organization?”

Sometimes, people’s strengths get lost within an organization. Pitter encouraged HR to make sure leaders have visibility to the next cohort. One way to do this is holding skip-level meetings. Pitter said that it will also sometimes be necessary to look externally to identify the right leader for a successor role.

She advised HR to prioritize key roles for succession planning, which may not always be those at the very top. “Some people will be focused on the CEO and the CFO, but for others, it might be a regional sales leader or the general manager of a branch. Figure out the key roles for your organization,” she said.

HR should seek out and share as much data as possible to secure buy-in for the plan. It’s important to measure the outputs that are available, Pitter said. “You’ve taken the time to identify successors and the most important roles that require a succession plan, so now you must measure the outputs, whether internal or external—the data available regarding mentorship, executive coaching, overall performance and leadership. It’s important to know when you may need to change course. If you just let a plan run on its own without measuring performance, you could find out at a later stage that the leader is not the right successor.”

Finally, for a succession plan to come to life, it is imperative that HR put a name and a face to successors to ensure that other leaders can visualize the plan and provide feedback on the current bench strength in the organization.

“Remember, succession planning is not a one-size-fits-all process,” Pitter said. “Reviewing external case studies and data on how other organizations have been able to seamlessly transition leadership capabilities is a good starting point. But resist the urge to copy and paste any other succession plan. Your plan will be hard to own and embrace if it’s not tailored to your organization’s specific needs.”