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Succession Planning: Is Your Business Ready for the Future?

A recent Bersin survey by Deloitte showed that more than half, 52 percent, of business leaders do not have confidence in the ability of their direct reports to reach the C-suite.

Other work by Bersin notes that 83 percent of companies are worried about their leadership pipelines but only 8 percent believe they have good programs to develop leadership among Millennials.

These figures are striking. They point to the critical importance of leadership development and succession planning. Without these crucial programs in place, with deliberate and dedicated focus, businesses will falter when faced with a departure or retirement. With the vast Baby Boomer generation nearing or at retirement age, the talent gap is sure to widen.

Invest in Your Employees

Employees are arguably a company’s most valuable asset. Wisely investing in that asset is crucial for growth. Unless organizations invest in leadership development, the leadership pipeline will dry up quickly. It only takes a couple of key departures for a company to stall considerably as strategies go unmet due to a lag in filling key positions.

Shorten the Time Gap Between Leaders

With leadership development and succession planning, companies also reduce the time gap needed for new leaders. Internally promoted leaders will already be familiar with the business, its customers, operations, personnel, culture, terminology, and goals. Externally sourced leadership needs to learn all those facets.

What are some steps that top organizations take to ensure they are prepared for the future?

    • Create effective performance management processes. Performance management is essential for aligning employees to business objectives and outcomes. Equally important is the role performance management plays in employee development.
    • Identify top potential. Effective succession planning means finding lower-level employees who are ready for more, have innate skills and are teachable.
    • Diversify the knowledge base. A recent article in Harvard Business Review discussed the work Twitter does in providing contextual leadership development. Twitter believes that online tutorials and training workshops are less effective than continuous learning on the job. Instead of focusing on skills, the company focuses instead on creating a workplace where employees have opportunities to learn from and teach each other. “Done right, this kind of learning teaches employees new skills and results in knowledge being shared across the company,” writes Melissa Daimler, head of Twitter’s global learning and organizational development team.
    • Retain the talent. This may seem obvious, but if time and resources are spent on top talent, it’s imperative to keep that talent inside the company. Employees who see their employer investing in them are far less likely to leave. Retention often requires further agility, allowing talented employees to transfer to other divisions, reward them for their talent and abilities, and check in frequently to identify departure risks and address them directly.

The loss of key employees does not need to be a catastrophic circumstance. In fact, by having a deep bench, companies will have the next leader groomed, prepared and eager to take on a new challenge.