“Change is the law of life. And those who look only to the past or present are certain to miss the future.“
– John F. Kennedy
Succession planning and replacement planning are two different things. Replacement planning is focused on identifying immediate understudies, while succession planning is focused on developing talent to move forward.
What is Business Succession Planning?
Successful succession planning is related to leadership development. It develops a pool of talent so that there are numerous qualified candidates throughout the organization to fill vacancies in leadership. Succession planning used to concentrate on developing leadership at the top level, but now it is building a strong talent base, which helps to increase employee loyalty and ensure the longevity of the company. This strategy requires recruiting qualified talent, creating a talent pool, and instilling loyalty.
Benefits of succession planning:
What does succession planning require?
What Is Replacement Planning?
Replacement planning works under the assumption that the structure of the organization will not change. This is easier to apply in small family businesses that do not have any goals to expand or grow in the future. There are typically two or three “replacements” identified in the organization chart. Each backup is listed with his or her ability to replace an existing leader. The employees are not necessarily developed to understand the new working environment or smoothly transition into his or her new responsibilities.
Many executives believe that they are engaging in succession planning, but in reality, they are still using replacement planning.
The Main Differences:
Succession planning takes a little more time and effort from those in leadership, but it yields a high return on such an investment.
Deciding What You Need
There are several different factors that indicate when a company needs to implement or re-evaluate succession planning.
Jacob had to plan for the scenario that there may be a vacancy within the company. First, he inspected the actual requirements of the company. After seeing record-breaking sales and profit, it was safe to assume they should expand. This called for his plan to be one of succession rather than replacement. Given the current talent base he had to work with, he knew that there were many employees who required only a little training in order to become the next successful leaders of the company on the occasion of a vacancy.