Although the term “succession planning” is not commonly discussed in Icelandic business circles, many people are familiar with the term. The succession planning that is probably the best known in the world was realized when Queen Elizabeth II of the United Kingdom passed away in September 2022. This was followed by a detailed process that concluded when her son and successor, King Charles III of the United Kingdom, was crowned king in May 2023. While we see positive examples of succession planning, such as in the case of the British crown, we have also seen the horrific outcome in the series Succession when such a plan is not in place, which follows the vicious and bloody conflict between siblings for control of the dynasty.
Succession planning goals
The goal of succession planning is to ensure that key positions within a company are filled with the most qualified individuals at any given time. This involves defining the necessary skills, experience, and attributes for key positions, thereby ensuring continuity in the company’s operations when there are changes in management and key employees.
In its simplest form, a succession plan includes four elements:
- Definition of key functions
- Assessment of the competence of employees in these positions, for example through performance appraisals or competency analysis.
- Leadership training for potential successors.
- Creating a contingency plan for unexpected changes.
Definition of key functions
Succession plans often cover key positions such as CEO, CFO, CFO, and HR. However, it is also important to focus on experts with invaluable knowledge that cannot be easily replaced.
Competency assessment
Once the scope of the succession plan is known, the work itself begins. This involves defining the necessary skills, experience and, no less, personal qualities of managers or employees in key positions. At the same time, the knowledge and experience of those already performing these functions is mapped, for example, through performance appraisals or competency analyses.
Leadership training for prospective successors
It is important to provide targeted leadership training for potential successors. This can include executive coaching, mentorship, consulting with more experienced people, or participation in projects that provide employees with diverse experiences.
Contingency plan for unexpected changes
It is important to prepare a contingency plan to ensure stability, for example if a manager or key employee suddenly leaves or becomes ill.
The succession plan must be communicated to key personnel and, where appropriate, other personnel. The plan should be a living document that is constantly evolving and being reviewed, as the skills and knowledge requirements of key personnel change in line with changes in the external and internal environments of the company.
In a world where change is a daily reality, most companies and organizations should have some form of succession planning. Whether it’s a large corporation, government agency, or political party, the project is about minimizing the risk of losing key employees, ensuring stability and competitiveness in times of change, reducing employee turnover, and encouraging employees to develop professionally.
Succession plans are therefore not just for royalty and large corporations – they are essential for all companies and organizations that want to ensure operational stability.
