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Five Business Reasons to Implement a Succession Planning Programme


The art of succession planning focuses on being able to identify alternative options should one’s initial plan fail or cannot be implemented. For this reason, Succession Planning is very similar to Contingency Planning insofar as succession planning within an organisational context increases organisational flexibility and helps an organisation have more than one option in any situation.

But what does Succession Planning really focus on?

The secret of an effective Succession Planning programme is one – identify your key activities and make sure you have more than one option that will still enable the activity to be carried out as planned. A stunning example the whole world has seen how important succession planning is was in this year’s FIFA World Cup Finals that were hosted by Brazil. The Brazilian football team was built around two key players, Thiago Silva and Neymar, and as long as these two players were in the team, the host nation managed to progress in these finals. As soon as these key players were missing for the semi-final, the lack of alternative suitable options was evident immediately – and people in the football world still speak today of this incredible sporting result that the Brazilian national team suffered at the hands of the German national team.

This example summarises the business importance of having a tried and tested organisational succession plan that can be counted on whenever necessary. Although the labour market is to a great extent still an Employers’ market, nonetheless organisations have to develop contingency or succession plans for their key activities. Such succession plans have one main objective – identifying the key activities and ensuring these will be carried out no matter who carries them out.

Similar lessons have also been seen from industry, where a long list of organisations have either been taken over by competitors or other members of their respective supply chain simply because such organisations failed to plan for business succession. One of the most illustrative organisations that suffered this fate as Kodak, which was the market leader in photography and printing up to the introduction of digital photography.  It was actually Kodak who had made the technological breakthrough into digital photography during the 1990s, only to shelve it as the organisation feared that such a revolution would take over its’ more established products. Failure to proceed with such business succession eventually led to this organisation’s bankruptcy in January 2012. Although the organisation has recovered since then, in the words of Antonio Perez[1], Chairman and Chief Executive of Kodak, “This is a totally new company.”

Succession planning thus integrates human resource planning with business planning, marrying the two so that all key activities are carried out no matter what happens. So similar to how business continuity exercises and protection of immovable assets are given priority by an organisation, so must the necessary human resource plans to ensure the key activities are also implemented.

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The five main business reasons why it pays an organisation to invest in a suitable succession plan

  • Continuity of operations; similar to how in finance we negotiate an overdraft facility, and in I.T. we plan towards data redundancy: in people management, we need to consider the cost of not being able to carry out these key activities.
  • Financial and business loss; by not being able to proceed with a specific course of action could lead to the organisation losing out on an opportunity, or incurring penalties for non-completion. Succession planning is thus not just about the person, but it is more about maintaining business effectiveness.
  • Human capital loss; having a succession plan already in motion means that process or activity owners would not only be identified, but any areas where there could be a potential loss of human knowledge would also be identified a priori – that is, before such potential losses actually materialise.
  • Competitive edge; being already within the market means that an organisation has both a presence and a market following: being certain that the organisation would be able to keep its’ competitive edge and improve on this is vital in today’s global environment. An effective succession planning framework ensures the organisation’s competitive edge is retained as all valuable knowledge gained is retained within the organisation.
  • Business goodwill; as employees are recognised as an organisation’s greatest asset, retention and effective use of people’s knowledge and capabilities directly affect business goodwill. Succession planning also leads to recognising and giving value to these capabilities as a source of service differentiation, adding business value and hence goodwill to the organisation.

In today’s global marketplace, business knowledge and connections are becoming a strong source of competitive advantage. Hence an effective succession planning framework is vital for maintaining business continuity, ensuring the organisation’s effective use of available human capital for continued success.

[1] https://www.bloomberg.com/news/2013-09-03/kodak-exits-bankruptcy-as-printer-without-photographs.html

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