Leadership and Succession Planning – Preparing Your Organisation for the Future

5th September 2016

One of the greatest HR challenges facing businesses in Britain is developing leaders, according to one recent survey. With the pressure of immediate business priorities, it can be all too easy to concentrate on the here and now rather than planning for the future. But, if succession planning is neglected, there is the risk that an organisation could be plunged into turmoil once managers or other key staff members leave or retire.

Other research studies have repeatedly shown that a shortage of leadership skills is a major problem for British business. This means, if potential management and leadership talent is not identified early and fostered within your company, there could be a risk that the potential leaders of the future will leave and go to competitors.

Having user-friendly, easy HR software can help in leadership planning. Packages such as FMP Amity enable you to access relevant personnel data simply, while at the same time freeing you up from routine tasks so that you have more time available to concentrate on strategic planning.

Finding and Developing Leadership Talent

In a recent survey by leadership institute Roffey Park, nearly 80% of the HR managers who took part thought that developing the right management and leadership styles was the major HR priority for their organisation to tackle. A high level of concern was also voiced in the same survey over succession planning.

There are fears that many larger companies in the UK are too quick to hire leaders from outside. Research by PwC Strategy found that 58% of new CEOs appointed in 2015 were hired externally. However, despite the reluctance by firms to appoint from within, there are advantages to “growing your own” leaders. Internal appointments tend to be less expensive, while the candidates already know your company culture, meaning they may be able to get up to speed quicker, and they also have greater loyalty.

So how can companies go about finding candidates for future leadership and giving them the right training? This works best if HR are involved in the talent strategy, since there is a need to look at staff fairly and objectively to see which employees have the qualities and skills needed for future promotion or leadership.

Appraisals can be a way to pick up on potential and identify training needs. When somebody is being considered for management training, simulation exercises are increasingly being used to get an idea of their potential, facing them with a number of scenarios and then analysing their responses.

Being sent on leadership training courses is also important, but it is only one way of preparing people for future responsibilities. It is equally essential to ensure that prospective leaders get experience of managing real projects, with mentoring and support from higher up to help them succeed and gain confidence.

Succession planning is not just about CEOs and top managers, since it is also important to have the right strategies in place to avoid gaps if other key staff leave or move to another department. This includes ensuring that other members of staff are trained in aspects of their work and ready to step in.

Succession Planning for Small Companies

While leadership and succession planning for larger companies might tend to be more in the headlines, the issue is if anything even more vital for small companies. One survey last year found that over 33% of employees working for SMEs in the UK warned the business would be likely to close within the month if the founder suddenly left.

It is important for small business owners who are thinking of stepping down to look to the future, think about who might take over and discuss their plans with other family members and professionals.

As with larger companies, succession planning is also needed to ensure you can fill the gap if key staff members leave. It helps to be flexible and ensure existing employees know different areas of the business, so they can be prepared to give cover if necessary.

Easy to use HR software FMP Amity includes career management and succession planning as part of its core functionality, and can be used to help ensure staff get the right training and support. HR payroll system FMP Teamspirit can also be used to collect key data about employees in particular areas of a business, as well as offering recruitment and appraisal functionality.

For more information and guidance about these issues, download our free eBook Defusing the Management Timebomb