21-step succession planning checklist to smooth your next transition
Only 35% of organizations have a formalized succession planning process. This could soon become a mission-critical gap. Approximately 10,000 Baby Boomers will reach retirement age every day through 2030, challenging organizations to replace them. A succession planning checklist can help.
A succession planning checklist is a step-by-step guide to creating an effective succession plan. It adds structure to a notoriously unpredictable process, making it easier to identify, cultivate and ultimately secure fresh talent while minimizing disruptions during transitions.
This article will offer 21 steps you can start using today to formalize your succession planning strategy.
Succession planning checklist phase 1: Preparation
1. Establish a succession planning committee
Identify a group of key stakeholders who will oversee the succession planning process. If developing a board succession plan, this is often the nominating and governance committee. C-level succession, on the other hand, is typically overseen by the CEO, other C-level leadership, the board of directors and representatives from HR.
2. Define roles and responsibilities
Working within the committee, identify who is accountable for each aspect of succession planning. This includes identifying successors, managing the succession planning template and overseeing the final decision.
3. Develop a succession policy
Succession planning should follow a structured process. Your committee should collaborate to formalize its approach. Consider the purpose of succession planning, the scope, and any guidelines committee members should follow. Policies often touch on key issues like board composition and the organization’s stance on diversity, equity and inclusion.
4. Identify critical roles for succession
Who within the organization needs a succession plan? This could replace individuals already expressing departure plans, such as a board director anticipating retirement. However, it should also include C-Suite and board positions with a high organizational impact. Your committee needs a plan if these valuable individuals depart unexpectedly.
5. Assess in-house talent
Many people think of broad talent searches when they think of succession planning, but the perfect candidate might be closer to home. Review existing leadership at all levels to identify promising internal candidates. This can simplify the search or allow the committee to determine the organization’s talent gaps and opportunities that a fresh candidate can fill.
6. Set succession criteria
A successful candidate will look different for each role. Consider the skills, competencies, experiences, and values that best serve the organization. The skills you desire should also consider the gaps you need to fill. For example, if the board of directors has weak technological capabilities, prioritizing directors with a tech background can make the board more effective.
Succession planning checklist phase 2: Analysis and planning
7. Assess specific roles
Identify the likelihood of succession for specific roles. Consider risks related to turnover, skill gaps or unforeseen changes for each key position. Your committee should also evaluate how likely a board director or executive is to leave the company or whether the organization may need to take action based on poor performance.
8. Develop success profiles
Create detailed profiles for each role and write job descriptions, including required competencies and strategic objectives. While you may not need the descriptions immediately, they will help you visualize the right type of candidate to drive the organization forward.
9. Benchmark against your industry
Compare the profile you created with external trends and your competitors. Does the CEO of a successful competitor come from a specific background? Are more companies in your industry appointing board chairs with a specific type of expertise? While you shouldn’t base your decision entirely on benchmarks, it can help validate the needs you have already identified.
10. Identify potential leaders
Compare your profiles to internal and external talent. For internal talent, comb through performance reviews, leadership assessments and other insights to assess how they align with your ideal candidate. Track similar external talent so you have a pipeline for essential positions.
Succession planning checklist phase 3: Candidate development
11. Create individual development plans (IDPs)
If you have internal candidates with high potential, consider how you can cultivate their talent. This might include addressing skills gaps, preparing them for potential challenges or exposing them to new responsibilities that their new position would call for. Preparing internal candidates can go a long way to smoothing transitions because you won’t have to start from scratch if a board member or executive departs.
12. Offer leadership training
Identify training opportunities that could strengthen candidates’ capabilities. It’s important to remember that no candidate will have every skill or experience on your profile. However, tools like education and template libraries or connecting prospects with mentors and executive coaching can round out their skills.
13. Rotate high-potential leaders
Take time to pressure-test promising candidates. If the role you are considering them for has responsibilities they haven’t been exposed to, rotate them into new roles or special projects. These cross-departmental experiences can increase their awareness and understanding of the new functions they must tackle successfully.
14. Document career pathways
Start to articulate your transition plan. This includes outlining how potential successors will move into their new roles over time. While you may not have that luxury if a company leader departs unexpectedly, taking a staggered approach to transition can be effective when managing retirements.
Succession planning checklist phase 4: Transition planning
15. Simulate your transitions
You don’t have to wait for a leader to depart to determine whether your transition plan will succeed. Test the readiness of all potential candidates by assigning them an interim role or tasking them to ask as if an emergency succession has occurred. This can be an effective way to observe how your candidate will respond to the pressures of their potential new role.
16. Develop onboarding plans
Start preparing onboarding and integration plans for new leaders. Be specific about how you will orient them to their new role and the order in which they will take on new responsibilities. This can avoid overloading someone on their first days and weeks in the role, making it easier for them to get acclimated and, eventually, succeed.
17. Build a communication strategy
Change can be scary, especially for employees who work directly with either the position you are filling or the candidate you’re moving into a new role. Succession plans can also disgruntle employees who may have been eying the open role. Plan how you will communicate changes internally and externally to minimize disruption and gain buy-in from key stakeholders for your candidate of choice.
18. Engage stakeholders
Key stakeholders in transition planning include investors, board members and employees. Conducting transparent succession processes makes stakeholders feel valued and builds their confidence in the integrity of the process.
Succession planning checklist phase 5: Execution and monitoring
19. Finalize succession plans
Document your final plans. Detail your successors, estimated timelines and contingency plans for unexpected departures. This will give you a trusted resource for navigating change in key positions. However, it’s also important to allow this document to evolve as your needs and available talent shift.
20. Review and approve plans
Present your succession plans to the board of directors and secure their approval. This isn’t a final confirmation of candidates, but it is validation that they accept the succession planning process and its initial results. Gaining their buy-in will help smooth future transitions.
21. Monitor and update succession plans
Your succession plan should be a living document. The candidates you’ve cultivated could leave the organization or change their career path. Likewise, individuals who plan to retire could decide to remain in the workforce. Schedule periodic reviews to ensure your succession plan aligns with the organization’s needs.
Streamline leadership changes with succession planning tools
A succession planning checklist is often the driving force behind systematic and effective succession plans. However, tracking succession planning in a document or spreadsheet can be a manual and disjointed process, making it challenging to ensure consistency and accuracy in candidate evaluations.
Diligent Boards can aid in succession planning through several key features:
- A director & executive network: This feature provides access to a vast and diverse pool of candidates for board and executive positions. By tapping into this network, organizations can identify and evaluate potential leaders who bring a wide range of experience and qualifications, ensuring that the board remains robust and forward-thinking.
- Executive compensation & governance benchmarking: Staying informed about the latest trends in executive compensation and board composition is crucial for effective succession planning. Diligent Boards offers up-to-date data that helps organizations design competitive compensation packages and benchmark their practices against industry standards. This ensures that the organization can attract and retain top talent.
- Nominations & board health checks: This feature helps enhance the diversity and effectiveness of the board and executive team. By leveraging resources, insights, and technology, organizations can identify candidates with the right experience and skills across various industries. This not only ensures a well-rounded board but also helps in maintaining the overall health and performance of the organization.
Learn more about Diligent Boards and how you can use it in tandem with your succession planning checklist to future-proof your succession planning process.
