Are organizations placing enough emphasis on succession planning?

It is my experience that the smaller the organization, the less likely they are to have succession planning. I believe the smaller the organization, the more they may need some type of contingency succession planning in that they may not have the needed skills or manpower to cover for a key employee leaving the company with little or no notice.

I agree with Chiara. Lots of places here in Alberta Canada, say they are doing it but when I ask to see the plans (in my role as a consultant) I get the blank look.

I have found that very few companies have succession plans until the owner dies or announces their retirement.

I am seeing more small business owners nearing 50 years old who are looking to create a succession or selling plan. That's because they were just told that their business -- without them -- isn't worth much and they want to fix that.

You have to hear the expletives when I tell my clients that they need to create an exit vision statement. :) Just getting them to do that is difficult since it brings up death, etc.

All of the above answers are correct. The real question is what is preventing people from developing succession plans? In our experience, in many cases the reason for not engaging in succession planning has alot to do with misunderstanding of the uses of succession planning. Most people, and particularly smaller business CEOs, see succession plans as a "what happens if I get hit by a bus" plan. And, there is not doubt that that is one of the uses of a succession plan.

However,if some educating can be done, there are many other benefits from implementig succession plans. These range from professional development for multiple tiers of players in an organization to opportunities to reconfigure to capture talent to significant employee retention features. Those of us who work in this arena need first to educate on the benefits. With information, the concept of introducing a succession plan suddenly feels more like a good business move.

Hope this adds some ideas to the discussion.

Great comments above!! I have experienced succession planning for myself and many others in small, medium and large organizations and find them all to be different. I think the most important step is to identify the reason for the succession planning in the first place.

For business owners: (How do I cash in on my success for retirement? or How do I position my family member(s) to continue the business after I retire?

For most of middle and upper management: (How do I develop my successor so I can be available to move up?)

For senior executives in larger organizations: (How do I ensure continuity and create a success path to ensure shareholder value?)

While that are many more examples you could list, my point is that identifying the reason drives the direction.

Today's challenge is even greater as the workforce ages and is replaced by people with different values & motivators. In Lynne Lancaster & David Stillman's great book "When Generations Collide", they describe research and predictions from futurists that Millennials in the workforce today "will experience as many as ten career changes in their lifetimes" -- not job changes but CAREER CHANGES!!!

Try succession planning with this kind of mobile workforce. Whom do you invest in and groom? How do you know they will be there when you need them?

On this subject, I believe we really have our work cut out for us.

Crystal balls are not very accurate and most executives are reluctant to make assessments about long-term developmental needs for succession plans.

Succession planning is quite different from current performance appraisal. The evaluations follow different criteria and consider different knowledges, skills and abilities (KSAs). It is common to find that back-up plans do not match present performance evaluations. Someone who is perfect as a replacement may be unsuited for their current job; excellent performers in Job X may have little potential ability to handle Job Y.

Most frequently, employers never embrace a consistent comprehensive policy of assessing potential career path options and supplying developmental feedback to the candidates. First, they don't understand how to do it; second, they are reluctant to discuss it with the candidate. There are lots of problems and obstacles. How do you determine the needs for a replacement? Will the job remain the same or can it (or must it) be customized to match the best-suited candidate? Are there multiple people available as possible back-ups? What shortfalls do each have? How can you help them close the gaps to become "ready" ASAP? (Keep in mind that invariably candidates identified as "not ready but requires another year of seasoning" typically do just fine when thrown into the new job. How and when do you (or who?) communicate your tentative theoretical optional career growth plans with the designated candidae? Can you keep them from assuming they are an heir-apparent guaranteed the promotion? How do you manage their expectations? Can you help them develop new competencies without undercutting their current roles? There are a million issues.

Caty,
As a culture I would give U.S businesses about a C- or D+ in this area. We may have elaborate processes on paper, but in reality we do a pretty poor job of this.
In many cases we use the "mini-me" model, my successor needs to be just like me, we have the "heir apparent syndrome" which places all the egss in one basket or we just avoid the topic altogether.
To Jim's point all too often the succession plan is present focused and technically focused (KSA's versus "whole person")
I believe succession planning is a key attribute of every C levels job. You should have 2 to 3 potential candidates for each position.
The military actually does a pretty good job of this...

Caty,

A missing link in todays current evaluation process ( a process to help employees and employers promote from within ) is the behavioral assessment capacity that we currently try with pen and paper.

Agreeing with Mark on his Mini-Me promotion base - absolutely the most blind method as we are all "guilty" of peacocking our "best self". The military has done a pretty good job of this, as well as public safety departments. The cry came out to them to stop the "buddy promotions" and put candidates who scored well in non biased assessments into the open positions, and even better the candidates that scored high were given more responsibility to bring them steps closer to promotion.

I tend to go back to the process of testing each employee with scenarios that they may encounter in a position slightly higher than they are currently placed. By testing in this way both employer and employee can see strengths and weaknesses to manager to. You have the luxury of video to play back to watch growth, or lack of - enabling you properly coach and evaluate employees throughout the year.

The smaller the firm, the less likely there is succession planning. The larger the firm, the more likely the succession plan is out of date and/or no longer relevant.

Companies are certainly not emphasizing succession plans. If they were, we shouldn't be facing the problem of seniors. They would be employed to train and coach youngers successors. Succession plans shouldn't mean lost of competencies just to promote gen X too fastly because companies fear they could loose them and also need to make place for gen Y.