Succession Planning

The 4 proven benefits of reliable Succession Planning

Last update: August 2022

Reduce organizational risks by realizing how important succession planning is

Corporate succession planning is the process of identifying and internally developing talent with the specific objective of replacing key business leadership positions in the company.

What distinguishes high-performing organizations from underperforming ones is 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.

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.

Even though the concept of corporate succession planning is not new, it has received increased attention due to the numerous advantages of succession management. These benefits are particularly important in a global business environment.

The 4 benefits of Succession Planning:

  1. Availability of capable individuals for management positions is increased
  2. The risk of losing experienced corporate leaders is minimized
  3. Fewer financial resources will be spent on the external search and development of candidates
  4. HR departments can establish formal procedures to support the process of selecting top and middle management

Ready to understand why your company need a Succession Planning? 🚀

1st Benefit: Availability of capable individuals for management positions is increased

Effective corporate succession planning increases the availability of capable individuals who are prepared to assume such roles as they become readily available. Leadership roles can easily be filled as senior executives retire or if senior management positions are vacated due to the resignation of key officers.

It then becomes imperative to realize that effective talent management is not simply about a position-driven replacement. The succession planning process is a well-planned-out, long-term procedure building a number of so-called “feeder groups” of qualified candidates, able to fill vacancies as they emerge.

2nd Benefit: The risk of losing experienced corporate leaders is minimized

The most prominent potential benefit of workforce planning is associated with decreased risk of the loss of experienced corporate leaders. The existence of effective corporate succession planning diminishes the need for an external search of qualified candidates for a particular position.

3rd Benefit: Fewer financial resources will be spent on the external search and development of candidates

Succession Planning also minimizes use of time and financial resources looking for new people capable to run senior management positions in the company. In situations of abrupt personnel changes, the benefits of succession planning become very apparent. There will be less time and reduced financial expenditure on recruitment and leadership development as qualified internal candidates have been already identified and trained.

4th Benefit: HR departments can establish formal procedures to support the process of selecting top and middle management

One of the advantages 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 selections, and re-establish the much-needed degree of commitment to corporate succession planning from everyone in the firm.

Even though organizations are often dissatisfied with the manner of its implementation, they cannot operate successfully without a well-developed succession plan. The key to a successful leadership management approach is to continuously engage and implement corporate succession planning and talent management.

Get the latest insights by IMD
Everything you need to know about Digital Ecosystems

An introduction to digital ecosystems A digital ecosystem is a combination of technologies that allow you to access information in real time. It’s a big buzzword today, but it’s not a new concept. The first digital ecosystems were built around the turn of the 20th century by British scientist Dr Alexander Graham Bell, who invented both […]

How to build efficient Digital Partnerships

Stay ahead in today’s digital age To stay ahead in today’s digital age, businesses must form efficient digital partnerships. By working with the right partners, you can create a robust digital ecosystem to help you reach new markets and grow your business. The last decade has seen the rise of a host of new technologies […]

6 genuine benefits of enrolling in a Management Training Course

What is a management training course? Lifelong learning and leadership skills development are critical to a long and successful career, regardless of experience level. Throughout your career, you will be exposed to a variety of challenging scenarios, which will require you to work more efficiently, deepen your knowledge and lead others. Generally, as we progress […]