Stop Treating Succession Planning Like You’re Just Filling Vacancies

Succession planning is one of those HR practices that all companies face at some point. But just because everyone should be doing it doesn’t mean everyone is doing it well.

It ends up overlooked, rushed, or treated like a simple vacancy-filling activity (it’s not) because most companies aren’t proactive about it. Approaching the succession planning process like it’s an ad hoc activity done as the need arises is a fundamental misunderstanding of what succession planning actually is: not just a diagnosis, but treatment too.

In this blog, we’ll dive into the biggest mistakes made during succession planning and what you should really be measuring during the process instead.

The 5 mistakes you’re probably making with succession planning

Let’s dive into the biggest (and most common) mistakes we see organizations making with succession planning.

1. Treating succession planning as a one-time event

A lot of organizations look at succession planning as a checkbox exercise. A one-time event requiring review when someone resigns. The problem in doing that is the inevitable last-minute scramble to find a replacement. You can’t always predict when people are going to leave, but you can identify some roles that might be at risk of turnover so you’re not completely blindsided when they do. For example, it shouldn’t come as a surprise to you when employees close to retirement age choose to, well, retire.

Effective succession planning is proactive—you need a constant cycle of development for potential successors before they’re needed. Continuous learning for employees translates to business continuity, and builds a robust talent pipeline. Of course, it’s a given that roles, business needs, and people’s capabilities will evolve over time, and good succession plan should be adjusted accordingly. We use our Capabilities platform to identify, track, and assess workforce capabilities, so we can see where we have capability gaps. It makes it so much easier to identify which employees need development, and which employees have the most potential for stepping into different roles.

2. Focusing only on leadership roles

It’s a common misconception that senior leaders are the only critical roles that need to be covered by a succession planning strategy. That’s not true—sure, leadership roles are important, and you don’t want them empty for too long. Especially when each role left unfilled costs a whopping average of $4,129 over a 42-day vacancy (and that’s just roles that aren’t revenue-generating, like sales). But key positions are all roles that have strategic impact on your business, not just leadership.

The problem here is that when companies ignore these non-leadership critical positions, they’re at greater risk of losing mission-critical capabilities. While you might have a plan for when your marketing team lead decides to switch up their career, if you don’t have one for the guy running your marketing campaigns and he suddenly leaves, you won’t generate new leads. Or maybe it’s one of your customer success staff who handles a bunch of clients, and if you don’t have a plan for who will take those accounts, said clients might take their business elsewhere. These are hidden risks and talent gaps that can’t be ignored. If these roles were to become vacant, it would have a significant impact on business operations.

3. Confusing potential with readiness

When you’re looking to future leadership roles, your first logical step is to look at your high-potential employees. But not every high-potential employee is ready to step into a bigger role tomorrow—one of the biggest missteps you can take is promoting people based solely on potential without considering their current readiness.

It’s not uncommon for employees to need a little professional development when they take on a new role, but there’s a difference between giving them training programs for specific skills and throwing them into the deep end. And if your employees aren’t prepared for leadership positions, your organization will suffer the consequences. It’s estimated that up to $8.8 trillion is lost worldwide each year due to poor management.

Ensure a successful transition by:

1. Assessing both employees’ potential (future growth) and readiness (current capability)
2. Providing personalized development plans to close gaps before they’re needed
3. Using multiple learning methods, like on the job experiences, shadowing, or mentoring to prepare successors.

We’ll dive into it a bit more down below.

4. Neglecting to involve employees in the process

In a similar vein to ignoring readiness for potential, ignoring employees (and what they want) is also a great way to ruin leadership transitions. Management isn’t for everyone. Just because someone has the potential to take on some type of leadership doesn’t mean they should, and simply identifying skill gaps for leadership development won’t change that.

It kind of comes back to only focusing on developing future leaders, rather than developing high-impact employees. Career growth isn’t only about climbing the corporate ladder—sometimes it’s moving laterally into adjacent roles that are just as strategically impactful. There are many employees whose career aspirations lie in delivering strategic objectives without a leadership job title.

Succession planning often happens to people instead of with them, which is why having visible career pathways is so important. Giving employees autonomy over what kind of roles are open to them allows them to set goals for their development. These goals don’t even have to be related to their assigned capabilities and learning needs, either—they can set goals to develop “interest capabilities”. They open opportunities to employees for new career pathways that otherwise wouldn’t have been available.

5. Not linking succession planning to capability building

Succession planning isn’t just about handing out promotions to the longest-serving staff, it’s about making sure future leaders have the capabilities to succeed. We touched a little on this when we talked about potential vs.. readiness. Capability building is an ongoing process. Roles change and adapt over time, just as your business objectives do, so it’s unsurprising that preparing successors for their roles should reflect that.

Successful succession planning needs to be proactive in that it involves assessing the skills, knowledge, behaviors, tools, and processes successors need, and providing targeted development initiatives to get them there.

What “good” looks like for performance and succession planning

The easiest definition of what an effective succession planning strategy looks like is that it should be linked to your organization’s capability framework. That is, the framework of capabilities your business needs to drive organizational success. There are four steps to creating a capability based succession plan:

1. Define capabilities for critical positions
2. Identify potential vs. readiness
3. Build tailored development plans
4. Monitor progress.

Step 1: Define capabilities for critical roles

You’ll want to prioritize which roles are critical positions to have succession plans ready for. This means assessing roles based on criticality (the level of mission-critical knowledge they have) and their level of vulnerability (the risk of the role becoming vacant due to turnover, retirement, etc.).

As a side note, no, this doesn’t mean you can forget about job roles at the bottom of the priority list. But low-priority roles tend to be junior-level positions that are easier to hire for, whereas critical positions may require certain experience or institutional knowledge that aren’t easily found. Plus, AI’s rise in the workplace perfectly positions it to automate repetitive tasks that entry-level employees are often asked to do, so there’s less reason to be in the lurch if those employees suddenly leave.

When you define capabilities for critical roles, you need to look at your business strategy. Capabilities are derived from strategy, they’re the how to achieving desired outcomes. They’re also future-focused, in that they can scale alongside organizational development and objectives. We recommend five core capabilities for each role.

We can’t stress enough that this is not a manual process. In our time on the circuit, we’ve heard from lots of organizations struggling with capability strategy because getting a capability framework off the ground is nigh on impossible. If you ever need inspiration, we have a whole Capability Library for you to choose from and use in your own frameworks. At Acorn, we automate the whole process of capability discovery, assessment, and development with our Acorn platform.

Step 2: Identify potential vs. readiness

Let’s give you an example of what we do here at Acorn.

“Readiness” is how well an individual performs their capability. We call that proficiency. Each capability has levels of proficiency (and a detailed description of what each level entails, so managers can easily assess employee performance). So, if an individual scores at a certain proficiency in their assigned capability, that’s their readiness.

“Potential” is where, well, employees have potential to perform at a higher level.

If every job role has five assigned capabilities, and each capability has an assigned proficiency level which is expected to be performed for the role. But maybe when you get to assessing employees, you notice they’re between levels. Not only are they meeting their assigned level, but they’re also able to perform some of the indicators associated with higher proficiencies (they just haven’t performed consistently enough to reach the next level yet). That’s their potential.

We’ve all seen succession planning when it’s handled poorly, where promotions are based solely on how long people have been employed at the company as if it’s a check-box exercise. Capabilities ensure that all succession and performance management processes are based on employees’ demonstrable abilities, not implicit biases that have no wearing on their work.

Step 3: Build tailored development plans

Close that potential-readiness gap with employee development. Don’t just slap a one-size-fits-all training program here—create tailored development plans designed to target the needs of intended successors. This can be difficult to do if you’re hiring talent externally, but the principles carry into learning and development initiatives.

Talent development helps you build an internal talent supply chain. You already know their proficiency, it’s just a matter of helping them reach their potential. At Acorn, we had a product designer who was interested in moving into learning module design. We were able to:

1. Review their current proficiencies with a capability assessment
2. See that there was capability overlap with the role they wanted to move into, and
3. Provide them with the learning and development they needed to turn their potential into readiness to step into the role.

Make sure learning addresses the specific readiness-potential gaps employees have, by mapping capabilities to content. A capability gap analysis shows you the difference between employees’ current proficiencies and their assigned proficiencies. Where there are gaps are where you need to assign learning, and you’ll know what learning to suggest because it’s all already mapped to capabilities. It might include online courses or interactions recorded by other employees. Or a more hands-on approach like coaching, mentoring, or shadowing the incumbent staff member may be a better fit for the roles and its capabilities.

Step 4: Monitor progress

This step of the succession planning process is where we’ve seen a lot of organizations fail, because they’re often one-time succession planning processes. But succession planning is synonymous with talent management, and you can’t just do it once and forget about it. You need continuous feedback.

Measure progress before and after the transition. That means monitoring succession candidates’ proficiencies as they progress through their development plans, and monitoring their performance after they fill critical roles by embedding succession planning with performance management.

• Schedule regular capability assessments, including both self- and manager assessments to measure proficiency levels.
• Set regular one-on-ones between managers and employees to keep track of KPIs or any blockers to progress that managers can help with.
• Use evidence and discussion from capability assessments to have constructive performance conversations.
• Adjust development plans and learning methods based on assessment results. If employees do training but still have capability gaps, then that could be a sign they weren’t doing the right learning.

The benefit to measuring progress is understanding business impact, or return on investment (ROI).  If development plans (and therefore transitions) were successful, then you’ll see a positive ROI. Poor transitions will have a negative impact, as employees struggle with their new role (which may also affect their peers or subordinates), and productivity and performance drop. Successful transitions will be the opposite, where employees can step into their roles with a shorter time-to-proficiency and start driving results straight away.

Final thoughts

Your talent strategy directly affects business impact, which is why capability-based succession planning is crucial for maintaining critical organizational knowledge. The last thing you need are vacancies in critical job functions that cost you your competitive advantage. Again, that’s over $4K for each role left unfilled for more than 40 days.

Modern succession planning can’t be a separate process anymore. It needs to be integrated with continuous capability building as an ongoing process to drive career development, performance management, and business continuity.