How Does Succession Planning Differ from Replacement Planning?

How Does Succession Planning Differ from Replacement Planning?

Originally published by David| Mar 14th, 2007 [Update September 10, 2013]:
It’s interesting how this definition and these recommendations shared in 2007 still hold true over six years later. Back then, talent pools were just emerging as a best practice; now they’re considered the norm.

Since David wrote this post, we’ve added a whole wealth of resources on succession planning best practice to our website. To make it easy for you, we’ve grouped them together in a Succession planning center of excellence. You might want to check them out.

We worked closely with succession planning expert Dr. William J. Rothwell, of Rothwell & Associates in developing some of these, including our free Succession assessment tool that lets you compare your company’s succession effectiveness against best-in-class programs.

Ask a CEO to define succession planning. There is a good chance that, if you do that, you will find that the average CEO confuses replacement planning and succession planning. But they are truly not the same.

Replacement planning assumes that the organization chart will remain unchanged over time. It usually identifies “backups” for top-level positions, as they are identified on the organization chart, and stops there. A typical “replacement chart” will list about 3 people as “backups” for each top-level position and will usually indicate how ready each person is to assume the role of the current job incumbent.

Succession planning, in contrast, focuses on developing people rather than merely naming them as replacements. Its goal is to build deep bench strength throughout the organization so that, whenever a vacancy occurs, the organization has many qualified candidates internally that may be considered for advancement.

In most cases, organizational leaders recognize that it is wiser to focus beyond replacement planning to succession planning to build the long-term sustainability and viability of the organization.

Several common symptoms, if they appear in an organization, may indicate the need for this more systematic approach to succession planning. Among them:

  • The organization has conducted a retention risk analysis, a process of estimating the projected departure dates for each individual in the workforce or work group, for reasons of retirement or otherwise.
  • The organization has no way to respond quickly to sudden, surprise losses of key talent. If a key person is suddenly lost due to death, disability or resignation, it may take a long time to find a suitable replacement.
  • The time it takes to fill positions-what is called the time-to-fill metric–is unknown or is perceived by managers to be too long.
  • Managers at one or many levels complain that they have trouble finding people ready for promotion or else have trouble finding people who are willing to accept promotions as vacancies occur.
  • Workers complain that promotion decisions are made unfairly or capriciously.
  • Women, minorities, and other groups protected by law are not adequately represented at various levels and in various functions throughout the organization.
  • Critical turnover-that is, the percentage of high potential workers leaving-is higher than the number of fully successful (average) workers leaving.

One approach is to develop talent pools. A talent pool is a group of people being prepared for more challenging responsibilities.

Individuals to be placed in talent pools may be surfaced by various means. One approach is to ask managers to assess and nominate people. Another approach is to apply objective assessment methods-such as multi-rater full-circle assessments to identify individuals who are likely to be worthwhile to develop for future responsibility.

Talent pools dramatize the difference between replacement planning and succession planning. In replacement planning, individuals are usually identified as “backups” for specific positions.

But replacement planning encourages promotions only in “silos” of specialization. In contrast, succession planning encourages managers at all levels to regard talent in any part of the organization as a possible successor for positions immediately above them. Hence, talent pools may be identified underneath each “level” on the organization chart but are not tied to specific positions at the next higher levels.

In many cases, talent pools are filled from the bottom up. High potential candidates being prepared for possible promotion are placed in talent pools. Of course, no promises are made to people who enter pools that they will actually receive promotions. Instead, the organization commits to help individuals prepare themselves to qualify for higher levels of responsibilities. But it is up to individuals to continue to perform well in their current jobs while also preparing themselves to meet the new challenges at higher levels of responsibility. Successfully implemented, when a vacancy occurs, the organization will have a pool of internal candidates ready to meet the challenge.

How does your succession planning strategy stack up? Take the succession assessment.


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