The world’s economy grows in leaps and bounds when businesses are grown and also sustained, by their owners through a well thought out strategic management planning.
This can only be achieved through its subset known as Management and Business Succession Planning culminating in an increased productivity and high return on investment to the business owners.
The Concept of Management Succession Planning
Management succession planning can be defined as “a set of processes practices and structures for identifying and developing personnel to fill critical leadership roles” – Sandra Davis, MDA Leadership Consulting, Chief Executive Officer (CEO).
Succession planning for the Chief Executive Officer should begin with the board of directors as this is one of its responsibilities.
In considering the development of the succession strategy, the board must consider the skills, experiences and characteristics it needs in the future CEO.
Further, the board needs to evaluate what the company’s CEO succession strategy will be in the event of an emergency or crisis.
Although the entire board should take responsibility for creating and executing the CEO succession plan, individual tasks may be delegated to one of the board’s standing committees. However, if responsibilities are delegated to a committee, it is important for the full board to properly identify and assign those responsibilities to ensure a congruent strategy.
The board can add value by helping the company’s executive leaders think through the succession process for other members of management.
The senior management, team, including the CEO, is responsible for implementing management succession planning, with the oversight of the board.
The human resources department is responsible for providing the tools needed to identify, notify and develop potential leaders in the organization.
Future leaders need to be aware that they have been identified as such so that they can work with human resources mentors and coaches on a plan to cultivate their talents.
These plans often entail not only moving up on the organization but also moving across business units and functions to learn the company’s overall strategy.
Some questions the board may consider in developing its management succession planning strategy include:
- Who are the key personnel with potential for senior leadership?
- How ready these potential leaders are, and what is being done to develop and cultivate them?
- What kind of talent does the company need in seniors leader-ship roles given its strategy?
- How well does the organization retain high-potential talent at ‘multiple levels and develop skills, experience and characteristics for the future?
- How deep is the bench for critical roles?
Considerations For Management Succession Planning
These include the following:
- Accelerated pace of change in the business environment.
- Evolving workforce demographics
- Increased workforce diversity
- Actions of peers and competitors
- Elevated, scrutiny that all stakeholders-employees, shareholders, vendors and customers are placing on succession planning.
- Other external factors