The benefits of succession planning are numerous, but not always well recognized. Most corporate entities today, regardless of size and location, cannot do without a carefully crafted management succession plan. In order to minimize risks associated with the loss of valuable personnel, companies must engage in talent pool management by first realizing the benefits of succession planning.
Firstly, let us understand what succession planning is all about, before exploring its numerous benefits. Corporate succession planning can be defined as a process that enables companies to identify and develop internal people with a specific objective of filling key business leadership positions in the company. Effective corporate succession planning increases the availability of capable individuals who are prepared to assume such roles as they become available. Thus, one of the benefits of succession planning is reduced risk associated with a loss of experienced leadership.
It becomes imperative to realize that effective talent-pool management is not simply about position-driven replacement. It is a well-planned out, long-term process that is about building a number of the so-called "feeder groups" of qualified candidates, able to fill in vacancies as they emerge. What distinguishes high-performing organizations from underperforming ones is the fact that successful entities understand the benefits of succession planning and thus engage in it on a continuous basis. In other words, their leadership perceives corporate succession planning as an investment, and not an expense.
Even though the concept of corporate succession planning is not at all new, it has received increased attention due to numerous benefits of succession planning, which are particularly important in a global business environment. The most prominent potential benefit is associated with decreased risk from the loss of experienced corporate leaders. The replacement of corporate executives is often seen as a task undertaken by the board of directors whose members normally look outside the organization to fill the emerged vacancies. The existence of effective corporate succession planning diminishes the need for an external search, minimizing time and financial resources. In situations of abrupt personnel changes, the benefits of succession planning become very apparent. They have to do with less time and reduced financial expenditure on recruitment as qualified internal candidates have been already identified and trained.
Another key benefit of succession planning concerns the ability of the HR department to engage and establish formal procedures to support the process of selecting top and middle management. Such actions minimize random or rushed selection and re-establish the much needed degree of commitment to corporate succession planning from everyone in the firm. In today's highly volatile business environment organizations strive to minimize risks through forward planning, including corporate succession planning. Even though organizations are often dissatisfied with the degree of its implementation, they cannot operate successfully without a well-developed succession plan. The key to a successful leadership management approach is to actually continuously engage and implement corporate succession planning. This first requires realizing the numerous benefits of succession planning.