Strategic succession planning: Building leadership pathways

In this article, we explore how strategic succession planning is central to organisational resilience and maintaining a competitive edge in today's dynamic market. From identifying potential leaders early through advanced performance management tools to nurturing them with tailored mentoring programs, you can fortify your leadership pathways and ensure your business thrives through transitions—even when your team is spread across the globe.

Read on to discover what an effective succession plan really involves, why it's integral for your business, and how you can effectively implement it to build a resilient future.

Understanding succession planning

Succession planning is a strategic process that ensures businesses can maintain continuous leadership by identifying and developing new leaders who can replace existing ones when they leave or retire. It's imperative for organisational resilience as it prepares a business to handle transitions without disruption, preserving the continuity of leadership and expertise.

Deloitte's research highlights a significant disconnect in succession planning: while 86% of leaders deem it essential, only 14% believe they manage it effectively. This gap shines a spotlight on the widespread challenges companies face in creating effective succession strategies, underscoring the need for a more focused approach that balances human insights with procedural rigour.

Beyond an HR mandate, effective succession planning is a strategic business advantage. Companies that fail to implement robust succession plans risk leadership vacuums that can lead to operational disruptions and strategic misalignments. This is especially pertinent in dynamic markets, where leadership agility and foresight are tied directly to organisational success and competitiveness.

Key metrics, like 'time-to-fill' for leadership positions and the diversity of the leadership pipeline, are essential to monitor as part of your succession planning process. These metrics can help you measure the effectiveness of your succession planning efforts and ensure that they're creating an inclusive and competent leadership team​.

Steps to strategic succession planning

Having a strategic succession plan in place is vital for maintaining business operations and ensuring long-term success. The steps we outline below are key when embarking on your succession journey, ensuring a smooth succession planning process and preparing a new generation of leaders for future opportunities:

Identify potential leaders

Identifying potential leaders involves recognising individuals with the capacity for future leadership roles through various methods, including performance management. Innovative performance management tools like those offered by Rippling’s full-suite HCM can significantly ease this process. These tools offer comprehensive analytics to identify high-performing employees, set performance benchmarks and regularly assess employees against these standards.

In recognising high-potential candidates early, you can allow for targeted development, ensuring they're ready to step into leadership roles when needed. This proactive approach reduces the risk of leadership gaps that can disrupt business operations and result in costly external hires. It ensures a pipeline of capable leaders who are prepared to take on higher responsibilities, thus safeguarding the organisation’s future.

Practical example: Through the use of comprehensive performance management tech, an Australian finance company identifies a financial planner who consistently exceeds performance targets. By recognising this potential, the company starts priming this developer for a future leadership role. They do this by providing leadership training, assigning the planner to cross-departmental projects, and involving them in strategic decision-making processes, thereby aligning their career path with the company’s strategic objectives.

Mentor for growth

Mentoring provides potential leaders with personalised guidance and development opportunities through structured programs. Platforms like Mentorloop streamline this process by matching mentees with experienced mentors who can offer insights, feedback, and support tailored to the mentee’s career goals and development needs.

Mentoring is pivotal for the personal and professional development of potential leaders, ensuring they acquire the necessary skills and confidence to succeed in higher roles. It accelerates their readiness by providing practical advice and real-world insights from seasoned professionals. 100% of Future 50 companies have mentoring programs, demonstrating the value of mentorship in leadership development. Without mentoring, potential leaders may lack the essential ingredients to succeed, leading to lower confidence and higher turnover rates among future leaders.​

‘In many ways, becoming a good leader rests in the development of soft skills - active listening, conflict resolution, motivational skills, navigating different personalities, etc. And while you can stress the importance of these skills and try to teach them in training sessions, it’s important to give future leaders closer exposure to how these skills have helped leaders within your organisation.’ Mentorloop Co-Founder and COO, Heidi Holmes, shares.

‘This is because real-world interactions are how these skills are truly learned. And mentoring is what gives emerging leaders the best chance to start developing these skills with the guidance of someone who has refined them over years of leadership challenges and successes.’ she adds.

Practical example: To support its rapid growth, a tech startup pairs promising junior engineers with experienced senior developers through a mentoring platform. In mentoring sessions, the mentees are provided with hands-on coding tips, strategic career advice, and guidance on tackling leadership challenges.

Beyond accelerating the juniors' technical and leadership skills, this process prepares them to take on more significant roles as the company expands. As a result, the startup sees improved retention rates and smoother transitions into leadership roles, ensuring a steady pipeline of prepared and confident leaders.

Provide tailored development plans

Tailored development plans are customised strategies designed to address the specific development needs of potential leaders, ensuring they're well-prepared for their future roles. Combining insights from performance management systems and mentoring interactions, development plans focus on strengthening individual skills, addressing specific gaps in their knowledge or experience, and aligning career aspirations with organisational goals.

Implementing tailored development processes into succession planning is key to creating a more robust and prepared leadership pipeline.

Practical example: A large retail company uses data from performance reviews and mentoring feedback to identify a store manager’s excellent team management and customer service skills, but lagging strategic planning abilities. As strategic planning is an essential element of the store manager’s potential leadership role in the future, the company designs a tailored development plan, including a leadership training course focusing on strategic thinking and financial acumen.

The store manager is also assigned a project to streamline inventory management, working with the logistics and marketing teams. Through this comprehensive approach, the company ensures the store manager is well-prepared for a potential regional role.

Continuous evaluation and feedback

Once potential leaders have been identified and enrolled in mentoring programs and tailored development plans, the need for continuous evaluation and feedback becomes critical. This involves regularly assessing the progress of potential leaders and providing ongoing feedback to guide their development. At this point, regular check-ins, performance reviews, and feedback sessions should be scheduled to monitor progress and adjust their tailored development plans as needed.

This approach is necessary for ensuring potential leaders remain on track with their development plans, allowing for timely adjustments to address any issues or new opportunities. By keeping the development process dynamic and responsive, organisations can ensure that potential leaders are always aligned with the organisation’s evolving needs.

Without continuous evaluation, organisations may miss signs of progress or issues that need discussing, leading to potential leaders not being adequately prepared for their future roles. This can result in ineffective succession planning, poor leadership transitions, and disruptions in business operations.

Practical example: A healthcare provider uses a comprehensive performance management system to continuously evaluate the progress of a nurse identified for a leadership role. The system schedules quarterly check-ins and performance reviews, during which the nurse receives feedback, and clinical performance and team management skills are assessed. These reviews highlight areas of improvement and achievements, allowing for timely adjustments to the nurse's development plan. 

The ongoing evaluations reveal that, while the nurse demonstrates improved team management skills, there are struggles with conflict resolution. As a result, additional training sessions and real-world projects are assigned to address this gap. This responsive approach ensures the nurse develops the necessary skills and confidence to transition smoothly into a supervisory role, thereby maintaining a strong leadership pipeline.

Succession readiness assessments

Succession readiness assessments evaluate the preparedness of potential leaders to assume higher responsibilities. These assessments involve a comprehensive review of an individual’s performance, development progress, and readiness to step into a leadership role. Conducted periodically, they ensure continuous alignment with succession plans and help maintain organisational stability and continuity. By evaluating potential leaders objectively, these assessments facilitate a smooth transition when leadership roles need to be filled.

Without implementing succession readiness assessments, organisations risk promoting unprepared individuals, which can lead to poor leadership performance, decreased team morale, and operational inefficiencies. This oversight can disrupt business operations and hinder the organisation's ability to maintain stability and achieve long-term success. Therefore, succession readiness assessments are pivotal to a robust succession planning process, ensuring potential leaders are well-prepared and the organisation remains resilient through leadership transitions.

Practical example: A manufacturing company anticipates the retirement of a plant manager. To ensure a smooth transition, the company undertakes a succession readiness assessment for a senior engineer who has been through various development programs. This assessment involves a detailed review of the engineer's performance data, leadership qualities, and development milestones achieved through mentoring and tailored development plans. The assessment reveals the engineer’s strengths in technical expertise and team leadership while identifying the remaining gaps in strategic decision-making and financial acumen.

To address these, the company arranges for targeted training and strategic project assignments. By the time the plant manager retires, the engineer is fully prepared to step into the role, ensuring continuity and stability in leadership.

Building a culture that supports succession

Creating a culture that supports succession planning is a vital element of ensuring long-term organisational success. Cultural readiness involves fostering an environment where leadership development is a continuous priority, ensuring that the values, beliefs, and behaviours within an organisation support the ongoing identification and development of future leaders. This commitment can be particularly challenging with a remote or dispersed workforce, but intentional strategies can overcome these hurdles.

When an organisation prioritises leadership development, it creates a sustainable leadership pipeline, ready to fill key roles as they become vacant. This readiness mitigates the risk of leadership gaps that can disrupt business operations and hinder strategic goals.

Tips for promoting an environment of continuous leadership development

To integrate leadership development into the core of an organisation, consider employing the following strategies:

1. Embed leadership development in organisational values: Leadership development should be a core organisational value, communicated regularly, including during the recruitment process, and integrated into performance reviews and strategic planning.
2. Provide access to development resources: Offering continuous learning opportunities such as workshops, online courses, and leadership training programs empowers employees to take ownership of their development.
3. Foster a mentorship culture: Encouraging mentorship at all levels of the organisation ensures potential leaders receive guidance and support. Formal mentoring programs can facilitate this process, matching mentees with experienced mentors.
4. Recognise and reward leadership development: Acknowledging and rewarding efforts in leadership development reinforces its importance. Recognising employees who engage in their growth and contribute to others' development highlights the value placed on succession planning.
5. Promote a feedback-rich environment: Cultivating an environment where continuous feedback is valued helps employees understand their strengths and areas for improvement, aligning their development with organisational goals.

Tips for succession planning with a remote/dispersed workforce

Managing succession planning in a remote or dispersed workforce adds complexity but can be addressed with specific strategies:

1. Leverage technology for connection: Strong communication channels are vital. Tools like video conferencing, instant messaging, and project management software keep remote teams connected and engaged.
2. Virtual mentoring programs: Implementing virtual mentoring programs ensures all employees have access to mentorship opportunities, essential for their development, regardless of location.
3. Regular virtual check-ins: Scheduling regular virtual check-ins and performance reviews helps maintain a pulse on the development of remote employees, providing timely feedback and adjusting development plans as needed.
4. Inclusive development opportunities: Ensuring remote employees have equal access to development opportunities, including virtual training sessions and online courses, fosters inclusivity and continuous growth.
5. Build a trusting culture: Trust is important in a remote environment. Leaders should foster trust by being transparent, communicating openly, and supporting their teams, encouraging remote employees to engage fully and invest in their development.

Ready to create a resilient, future-ready organisation?

It's clear to see that strategic succession planning is essential for organisational resilience and maintaining a competitive edge. By identifying potential leaders early, nurturing them with tailored mentoring and development programs, and continuously evaluating their progress, companies can ensure a seamless leadership transition. This approach is essential for safeguarding business continuity and fostering a culture of continuous development and readiness for future challenges.

There’s no denying that effectively executing a succession plan can be labour intensive and resource-heavy. Luckily, there's a silver lining. Rippling and Mentorloop offer advanced, innovative tools to streamline this process. Rippling’s all-in-one platform provides comprehensive analytics and performance management capabilities, allowing for accurate identification and tracking of high-potential employees. Meanwhile, Mentorloop’s platform facilitates effective mentoring programs, matching mentees with experienced mentors who can guide their development.

Together, these tools can help you build a robust leadership pipeline, ready to navigate transitions smoothly, while significantly reducing the administrative burden of succession planning, so you can focus on developing your future leaders.Start your succession planning journey with Rippling and Mentorloop today and create a resilient, future-ready organisation.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.