Think of a traditional family company, in which leadership is passed from father to son, usually the eldest, and you have an analogue of succession planning as practised by many organisations for the past century or so.
The chosen one would often be recruited (or born, in the case of a family company) and undergo rites of passage that aimed to teach them the business.
Starting on the factory floor, or the equivalent, and working their way through the enterprise, they would become familiar with roles and responsibilities and the way the business worked. The process could, and usually did, take years, unless interrupted by an unanticipated need for succession, although depending on timing, a regent could be appointed if the chosen one was not adequately prepared.
In larger companies, the human resources department would assess candidates and facilitate the process. A popular option was to start with a group of candidates who were all considered suitable and weed out the weakest until only the strongest remained.
The strategy worked well, in various adaptions, for most organisations, most of the time.
Let’s call it business as usual succession.
The main strength of business as usual succession is that the candidate is perfectly equipped to run the business as usual, to operate it as it always has been run.
I assume by now you’re way ahead of me and have identified the weakness in the business as usual succession plan. “What happens if the business does not run as usual?” I hear you ask.
Business as change
In today’s environment, it’s hard to think of a single sector where business runs as it did, say, 40 years – a working life – ago. The way we manufacture, build, buy, move, manage, sell or teach everything has changed. And if there’s anything left out of that list you can be sure that it has changed too. Nobody does business as usual any more.
Unfortunately, for many organisations, their succession planning does not reflect this. Today’s succession planning must anticipate business as change.
In practice this means building succession planning on the foundation of your organisation, your business’s strategy.
Examining your strategy should show you the pivot points – the positions where performance is critical to success. These are the roles for which you need clearly defined succession plans. Then, it’s about finding the people that either have, or can develop, the skills that align with the strategic needs of these positions.
This process can be optimised by using the full suite of HR tools, including Executive Coaching, which is becoming recognised as a fast track to identifying and developing effective leadership skills throughout organisations.
Succession planning is not a set-and-forget operation, but an ongoing process that should proceed hand in hand with the execution, review and rework of your business strategy. After all, the success of succession is an essential part of it.
Melinda Fell is Director of Melinda Fell Consulting, an executive coaching, leadership and development, and executive search and selection consultancy.
Article originally appeared on Australian Financial Review.