Tuesday, November 5, 2019
Great leadership is the hallmark of a successful business. In today’s dynamic market, it’s critical to ensure that the right talent is on deck as organizations shift and expand. However, business leaders have a lot of work to do on talent development and succession planning.
In the Global Leadership Forecast 2018 by DDI, The Conference Board and EY, more than 1,000 C-level executives said their biggest concern is developing next-generation leaders (64% globally and 79% in Canada), followed by failure to attract and retain top talent (60% globally and 55% in Canada). Yet, only 41% believe their organization’s leadership development program is high quality.
Human resources professionals’ assessments were lower than the C-suites’ views. Among the 2,500 HR professionals surveyed, 65% do not believe their organization’s leadership development program is of high quality. In addition, only 35% rated their organization’s bench strength—the supply to fill critical leadership positions over the next three years—as strong. On average, HR professionals said only 43% of positions could be filled by an internal candidate immediately.
There are serious risks to not having a succession plan, including financial costs (for example, stock declines due to the sudden departure of a CEO, or the cost of not filling a position quickly); loss of legacy knowledge; culture impact due to internal power struggles or low morale; and employee turnover, as those interested in leadership roles may be overlooked and go elsewhere.
Conversely, there is a wide range of advantages in having a succession plan. Research from Deloitte found that in addition to the obvious benefit of having a steady pipeline of leaders ready to step into new roles, the benefits include: enhanced career development for emerging leaders, driving greater engagement and retention of top talent; a stronger organizational culture; and a “future-proofed” workforce that is better prepared to thrive in dynamic and different conditions. 
There is certainly a pressing need for organizations to make succession planning a top priority, but it can be a complex, time-consuming undertaking. Here are five keys to help ensure a smooth and successful process:
While business leaders certainly think about succession planning, it’s time to put it on the top of the to-do list. As talent continues to be an organization’s key differentiator, a strong succession plan is a roadmap for continued success.