Succession Planning: An HR Leader's Guide to No-Drama Transitions

Succession planning gone wrong—or ignored completely—can wreak havoc at an organization. Maybe things won't reach the level of mayhem at the fictional Waystar Royco conglomerate on HBO's hit drama "Succession," but a sloppy transition can severely damage a company—and an HR leader's career.

It's estimated that 10,000 Baby Boomers are now retiring each day in the United States. And with layoffs increasing and more than half of workers thinking about quitting in 2023, organizations risk interrupting their operations and productivity by failing to properly plan to replace critical employees.

Yet somehow, succession planning still isn't on the radar for more than half of U.S. companies. According to a SHRM survey, 56 percent of HR professionals said their organization didn't have a succession plan in place. Only 21 percent reported having a formal plan, while 24 percent said their organization had an informal plan.

The benefits of smart succession planning can ripple across a company. For employees, a succession plan reassures them that their projects will have a competent caretaker after they leave. For the identified successors, it can be a motivator and retention tool. For affected teams, it provides stability and shows the company is thinking in a strategic way. And for the organization, it embeds a culture of agility where roles are seen as being fluid instead of reliant upon a single person.

Of course, not all positions need a succession plan. To decide whether a role requires a plan, look at its level of influence and ask whether the person has significant responsibilities for conducting business operations or hitting revenue targets.

"You can determine succession planning at the role level like VP and above or use a set of criteria for critical role identification," says Jordan McAnaney, vice president of talent advisory at MSH McAnaney in Ft. Lauderdale, Fla. "Ultimately, you want to invest in succession planning around roles that are impactful to the organization or would disrupt the business if the incumbent wants to leave."

6 Common Missteps to Avoid

A solid succession plan should be a collaborative effort, focus on critical roles, clearly define role outcomes, promote inclusion and always be open to change. If you check these boxes, your next step is to see whether your plan inadvertently makes one of these six common mistakes.

1. Thinking about replacing the current job holder, not the job.

Many organizations mistakenly think about replacing a particular person and not what that person does. "It's critical to not think about who is in those roles currently, but rather the goals of that role, the remit and the expected outcomes," says Celine Floyd, director of talent management at Cappfinity.

Start by looking at a role you're unsure about and consider what would go undone if someone wasn't in that role. If the lack of those things would put the organization at risk, then they are critical, and that role needs a succession plan.

Plus, if you think about planning for the role versus the individual, "that's how you open your mind to different types of people being able to do the same job, and that's how you harness the power of diversity and drive inclusion," explains Floyd.

2. Seeing succession planning as cyclical or set in stone.

Succession planning can't be "set [it] and forget it," says McAnaney. "It's also not always about a permanent solution. It's about evaluating all possible solutions to achieving your business objectives and getting creative."

Successful succession planning must also be revisited, reviewed, adjusted and repeated.

"Succession plans should be 'live,' meaning the scope and plan should be able to change to mirror the volatility within organizations," says Floyd. "A role that is crucial now, and the person earmarked for that role now, may not be the same in six months or one year, and that is very important for making sure you always act for the reality of the business needs."

3. Not doing anything.

With the scale of the task, it's not uncommon for succession planning to fall to the bottom of an HR leader's to-do list. But this is a big mistake. It's typically better to do something than nothing.

Floyd suggests thinking in bite-sized pieces to help overcome the temptation to avoid taking action. "Succession planning is typically something you build upon and perfect over time, not in one fell swoop," she notes. "In the first instance, simply being aware of and thoughtful about risky roles will make a huge difference."

You should also avoid creating your plan and not executing it. "Companies can go through this exhaustive process to get a beautiful succession plan, and then it just sits in someone's drawer until somebody leaves," says McAnaney. "Implementing your succession plan with strategic development actions and continuously evaluating its status are the keys to ensuring it succeeds."

4. Not telling successors they're successors.

Before you enter a room with leaders and talk about your high-potential employees, speaking with the envisioned successor is critical. When you do, "you might find that they were thinking about their trajectory in the organization differently or that they don't want the job at all," explains McAnaney.

The input from those employees will confirm whether they're on board with your plan and are pursuing a development process that includes the right preparation.

5. Skipping performance planning.

Preparing and developing successors is integral to a solid succession plan and builds a culture that encourages growth. According to McAnaney, this type of planning also forces business leaders to take performance management more seriously while equipping them to set up employees for success.

One way to put this into practice is to assess a successor's level of readiness when you let them know they are a successor (e.g., if they're ready now, in six months or in two years). With this readiness assessment, you can set better expectations for the successor and create a plan to fill in any gaps.

6. Not making your plans inclusive.

It's vital that your succession planning is inclusive and doesn't directly or indirectly leave qualified people out of the process. Historically, succession plans have tried to fill a role by looking for someone similar to the incumbent.

But Floyd notes that this is changing for many reasons—from the rise of diversity, equity and inclusion (DE&I) commitments to changing skill sets to the need for different leadership styles. She recommends taking a strengths-based approach.

"Look beyond competence to those who maybe haven't done the role before but have the motivation and skills to strengthen from," Floyd says. "This will mean a more diverse group of employees will be earmarked for roles, and over the months and years, this will powerfully drive DE&I efforts."