Succession Planning or Contingency Planning is one of those things that is often talked about, but often considered too complex for many smaller businesses to understand – or even justify the perceived cost of undertaking such activity.
And yes to those in the know, Succession Planning can be one of the most important human resource functions to sustaining business performance.
What is Succession Planning?
as a process for identifying and developing potential future leaders or senior managers, as well as individuals to fill other business-critical positions, either in the short- or the long-term
A case-study in Succession Planning
While talking to a business leader today, we got on to the topic of Succession Planning. We were discussion a business that was the vision of one person, developed and deployed by another that had the technical skills to bring the vision to life. The business was a success, in that it was growing year on year, with long term committed customers on a subscription basis. Then for a variety of reasons the technical specialist left the organisation. The whole business was built on a web based platform, which provided some unique features. Some of which, and certainly the details of which were only known by the architect himself. The business was left floundering, unable to fix problems as they arose. Unable to react to customer needs as they had done so in the past. The innovation ceased. Had the business put in place a Succession Plan (or a contingency plan), even at its most rudimentary, then some of the problems they encountered could have been avoided.
Contingency Planning – Seeing things differently
If Succession Planning is seen as a cost, and not of enough importance to put financial resources into it, then maybe looking at the problem differently can help HR managers and business owners understand the needs for succession planning activity.
What is Contingency Planning?
Contingency Planning is defined on Wikipedia as
A contingency plan is a plan devised for an outcome other than in the usual (expected) plan
In other words, its about planning for business as usual through expecting the unexpected using Contingency Planning. So in the example given above, it can be seen that the technology is critical to the running of the organization. That the organization was relying on the technical capability of one person. So what in the event of this person leaving, falling ill etc? The business knew that this individual was key for their business operations. That even the individual having a short term illness of a few weeks would cause them operational problems. In this situation the very least the organization leaders should have done is have done Contingency Planing for this persons’ short term absence.
Selling the business case of Succession Planning as Contingency Planning
If for reasons of budget or cost, a business is not prepared to look at Succession Planning as a strategic human resource function, then we as HR professionals need to help our leaders to understand that this is as much a contingency planning issue as it is a succession planning one.
Risk or Opportunity?
Do business leaders focus more on risk or opportunity when it comes to Succession Planning or Contingency Planning?
Many people see Succession Planning as an opportunity. An opportunity that MAY pay off, but has a cost attached to it, and the challenge is often justifying the cost for the perceived return – a return that for many will never be achieved. On the other had, looking at this as contingency planning, managing an identified risk, means that the “cost” of insuring a potential replacement in either the short or long term is a valid expenditure. Business or organizational leaders can see directly how this may impact the businesses ability to perform.
Summary Succession Planning or Contingency Planning:
What is succession planning in an organization? – its preparing to train & recruit people for important roles in the organization What is succession planning and why is it important? – If the skills or role is important for the continued success for the organization, then waiting months for a replacement may significant impact the organizations ability to serve its customers/ meet profit expectations
Succession Planning process for small business – is no different than for a big business (at least in concept). Identify the skills or roles that put the organization of risk of failing to meet customer (or stakeholder) expectations, and identify people or solutions to reduce the risk.
Contingency Planning Process – the actions of predicting what could go wrong, and having resources or solutions available in advanced.
The bigger the business is, the more important it is to use structured processes, templates or forms, but the what you do is far more important than the how you do it. Just in a larger business you many want more consistency as to HOW to actually do it across many 100’s of people.
It’s all in the language we use, If Succession Planning does not get your organizational leaders going, position it as Contingency Planning
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