Succession planning: a step-by-step guide with a template

Succession planning is the process of identifying the roles your organization cannot afford to leave empty, and preparing people to step into them when the current holder moves on, is promoted or leaves. It combines a list of critical roles, an honest view of who could be ready and when, and development plans that close the gap. Done well, it is an ongoing talent process, not a confidential list kept in a drawer.

This guide explains how succession planning differs from replacement planning, walks through a seven-step process, shows how to judge readiness using performance and potential evidence, and gives a simple template for what to record for each critical role.

What is succession planning?

The CIPD describes succession planning as identifying and growing talent to fill leadership and business-critical positions in the future. Two words in that definition matter: "critical" and "growing". Succession planning focuses on a limited set of roles where a vacancy would cause real disruption, and it is as much about developing people as about naming them.

A succession plan usually answers four questions for each critical role:

• What does the role need? The competencies, experience and knowledge that matter most now and in the next few years.
• Who could step in? Internal candidates, or a talent pool, at different levels of readiness.
• What would they need first? The specific experience, skills or exposure each candidate is missing.
• What happens if no one is ready? An interim arrangement or an external search plan.

Named successors or talent pools

The CIPD factsheet describes two broad approaches that many organizations now combine:

Many organizations use named successors for the top layer and talent pools below it. Whichever you choose, keep the process transparent enough that people understand how they can be considered.

Succession planning vs replacement planning

The terms are often used as if they mean the same thing, but they describe different levels of ambition.

Replacement planning still has a place. Every critical role should have an emergency cover arrangement. But a list of names without development does not build bench strength. William Rothwell's long-standing book on the subject, Effective Succession Planning, frames it as ensuring leadership continuity and building talent from within, which requires assessment and development, not only identification.

How to build a succession plan in 7 steps

The steps below reflect common practice and the guidance in the references at the end of this article. Adapt the pace to your size: a small company might cover five roles in a quarter, while a large group might run the process by business unit over a year.

1. Secure leadership ownership. Agree with senior leaders why you are doing this, which decisions it will inform and who owns it. Line managers usually own the plans for their areas, with HR facilitating and checking consistency.
2. Identify critical roles. List roles where a vacancy would seriously affect operations, revenue, safety, regulatory compliance or strategy, or where the skills are scarce in the market. Do not limit this to job titles at the top; specialist roles can be just as critical.
3. Define what success looks like in each role. For each critical role, describe the competencies, experience and knowledge it needs now and is likely to need in three to five years. A competency framework makes this step faster and more consistent.
4. Assess potential successors. Gather evidence about candidates' current performance, their potential to take on larger roles, their aspirations and their mobility. Use more than one source of evidence, and avoid relying on a single manager's view.
5. Judge readiness and agree the plan in a talent review. Bring managers together to discuss candidates against the same criteria, challenge each other's views and agree a readiness level for each person. Record decisions and the reasons for them.
6. Develop successors. Turn each gap into a development plan with stretch assignments, project work, rotations, mentoring, coaching or formal learning. An individual development plan template helps keep each plan focused and reviewable.
7. Review and update regularly. Revisit the plan at least once a year, and whenever a critical role changes, a successor leaves or the strategy shifts. Track whether successors are progressing and whether internal moves are happening.

Identifying successors: readiness, performance and potential

Choosing successors is where most succession plans succeed or fail. The core challenge is separating three different things: how well someone performs today, how much potential they have to grow, and how ready they are for a specific role.

Performance is not the same as potential

Strong performance in a current role is important evidence, but it does not by itself predict success in a larger or different role. Silzer and Church (2009) argue that potential should be defined and assessed deliberately, and they describe it through several layers: foundational characteristics such as cognitive ability and personality, growth factors such as learning orientation and motivation, and career-specific factors such as leadership skills and relevant knowledge. They also caution that organizations often define potential loosely, which makes judgments inconsistent.

A practical way to keep the two apart is to assess them separately and then look at them together. The 9-box grid does exactly this by placing people on a performance axis and a potential axis. For more on spotting potential in the first place, see the guide to identifying high-potential employees.

Readiness levels

Readiness describes how soon a candidate could take on a specific role with reasonable support. Many organizations use three or four simple levels:

Readiness is specific to a role. Someone can be "ready now" for one critical role and "ready in 3+ years" for another.

Evidence to use

Combining several sources of evidence gives a fairer picture than relying on reputation or one manager's opinion:

• Performance history over more than one review cycle.
• Structured assessments of potential, leadership and work style, interpreted by someone trained to read them.
• 360 feedback on how the person works with peers, teams and stakeholders.
• Career conversations about aspirations, mobility and personal circumstances.
• Track record in stretch assignments, where available.

Psychometric assessments can add structure to the potential side of this picture. TeamCheck's psychometric assessments include a High-Potential (HiPo) assessment built on six drivers (Learning Velocity, Complexity Navigation, Growth Hunger, Calculated Boldness, Execution Discipline and Inner Stability) and a Leadership assessment covering Strategic Vision, Influence, People Development, Executive Presence and Change Agility. Results can be viewed on a 9-Box Talent Grid, where potential is the average of the six HiPo drivers, exported as reports and linked to individual development plans. Assessment results should always be one input among several, not the decision itself.