Succession planning models represent an integral part of successful succession planning. Broadly defined, corporate succession planning is a process that allows firms to identify and develop internal candidates with a clear objective to fill senior-level positions as and when they become available. In other words, if well executed, corporate succession planning becomes part of a risk management strategy, which aims to minimize a company's exposure to skills shortage - especially in times of crisis, such as the sudden departure of a top executive. Minimizing the potential risk of personnel loss through carefully planned and executed succession planning models is crucial to an organization's continued success.
In recent years, the concept of corporate succession planning for the potential loss of organizational expertise has become extremely relevant as the benefits of succession planning have become widely recognized. This has been mainly triggered by two key factors: the outflow of senior and experienced executives associated with the retirement of the baby-boom generation and the complex nature of the global business operations. Both of these factors represent enormous risks for organizations and their ability to retain high-level expertise in the area of their core business. Succession planning models provide a much needed solution, minimizing organizational exposure and ensuring that the right internal personnel gets promoted to the right kind of positions, when they become vacant.
Even though the potential benefits of succession planning are numerous, they can only be realized with solid succession planning models in place. The development of such models is a task that falls under the Human Resource function and the responsibility of senior management. Only through such critical collaboration can an organization develop and implement suitable succession planning models that can ensure leadership continuity of the highest caliber. In fact, for most global businesses this is no longer a choice, but an absolute must.
The most critical component of successful corporate succession planning is an underlying organizational philosophy that that highlights the need to manage top talent in the corporation for the greater good of the enterprise. The most frequently sited reason for the failure of corporate succession planning is the lack of sustained desire to implement succession planning on behalf of Human Resources and senior management. In other words, it is often perceived as an expense and not as a potential benefit or risk mitigation strategy. This false view could be greatly modified by developing effective succession planning models that organizations could adhere to while implementing corporate succession planning.
There are several ways to approach the creation of succession planning models, but regardless of choice, most corporate succession plans would include the five essential steps outlined below:
Today's increasingly competitive global business environment carries a variety of opportunities and risks, such as the loss of senior personnel and the related expertise. In order to prepare for such planned and unplanned developments, organizations need to put sound succession planning models in place. The existence and implementation of such models is what distinguishes well-managed from poorly-managed firms. A corporate entity with global operations is unlikely to successfully navigate the challenges of global business without having in place and executing at least one or more succession planning models.