Article
Succession Planning Guide: Key Steps And Best Practices
12 mins read
Last Updated
By Shehzeen Arif and
Which person in your organization would be hardest to replace if they left or moved to a different role tomorrow?
The answer may not necessarily be the person at the top of the organizational chart. It could be a VP, an operations manager, or an automation engineer with specialized expertise and capabilities that few others in the organization possess. The risk goes beyond replacing a title. It involves reliance on an individual’s knowledge, relationships, judgment, or ability to keep high-stakes work moving.
This is where succession planning takes the role of a business continuity strategy. In this article, we will explain how to create a succession planning system that can help keep your organization resilient during periods of employee transition or unforeseen changes in key roles.
Succession planning is a strategic process that identifies and develops employees to fill critical roles when they become vacant. It supports organizational stability and continuity during sudden or planned employee exits and internal transitions, such as promotions and cross-functional transfers. It prepares team members for new responsibilities by developing the technical skills, knowledge, insight, and leadership capabilities they need to transition into significant roles and perform them effectively.
Succession planning helps organizations build a talent pool that can proactively respond to changing business needs and take on broader responsibilities. Developing the workforce’s skills and expertise can turn the workforce into a strategic asset and give the business a competitive edge.
It also protects organizational knowledge and insights that may be lost when seasoned employees depart or transition to new roles. A Robert Half survey of 2,000 hiring managers found that 53% of hiring managers reported challenges in preserving and transferring knowledge, which can make employee transitions more disruptive when critical knowledge is not documented or shared. This can include an understanding of internal processes, client relationships or vendor networks built over time, technical expertise, and internal best practices that might not be documented elsewhere.
Succession planning matters for smaller businesses as well. A smaller workforce can mean greater dependence on individual employees. When fewer people share critical knowledge and responsibilities, changes in key roles can disrupt daily operations.
It also gives employees a clearer path for career advancement by showing them how they can progress and which capabilities they need to develop.
An effective succession plan identifies critical roles, develops internal talent, and prepares employees for greater responsibilities.
Step 1: Identify Critical Roles
Succession planning begins by identifying the key roles within the organization that are crucial for its continued success. SHRM's 2025 research shows that businesses have started looking beyond the C-suite to include positions where a vacancy could disrupt operations or result in the loss of specialized expertise or important business relationships. These may include the following:
C-level Individuals And Executive Positions
Consider roles such as CEO, COO, and VP, where successors must be prepared to lead the business’s strategic direction while remaining aligned with organizational culture and values.
Middle Managers
Include roles where leadership gaps could affect strategic execution, cross-functional coordination, or team performance. SHRM’s Effective People Managers: The Linchpin of Organizational Success report revealed that 92% of HR executives consider people managers vital for ensuring their organization’s overall success, while 82% say they play a prominent role in accomplishing strategic business objectives. This reinforces the need to include management-level roles in succession planning, rather than focusing on just executive positions.
Frontline Managers
Consider roles where leadership capability directly affects day-to-day operations, team morale, and productivity. It can be challenging to replace the interpersonal skills needed to build trust with team members and inspire them to deliver their best each day.
Specialist Roles
Role criticality often varies by industry. In these cases, the loss or transition of a specialist may pose higher continuity risk if their expertise cannot be quickly replaced. A luxury fashion company would view designers and branding strategists as critical. On the other hand, an e-commerce business would place higher value on logistics roles.
Step 2: Define Critical Success Factors (CSFs)
With the potential succession needs identified, the next step is to define what successful performance in each position looks like.
Business Results
Define the key performance targets, business objectives, and measurable results associated with the position. This could include improving revenue, controlling costs, increasing productivity, improving customer outcomes, or meeting operational targets.
Problem-Solving
Consider how the person responds when challenges arise. Effective leaders should be able to identify the underlying cause of a problem, evaluate available options, and make appropriate adjustments when circumstances change.
Strategic And Future Readiness
The employee should be able to respond to changing market conditions, anticipate future challenges, and prepare their teams or functions for evolving priorities. For senior positions, this may involve shaping strategy; while at lower levels, it may involve adapting processes and priorities to support that strategy.
Technical Capability
Define the technical, functional, and industry-specific capabilities required to perform the position effectively. Consider the tools, processes, regulations, market knowledge, and functional expertise someone must be able to apply to produce the expected results.
Decision-Making
Define how much judgment the position requires, the types of decisions involved, and the consequences of getting them wrong. Effective decision-making involves assessing risks and potential outcomes and making timely choices when there is no obvious answer.
Emotional Intelligence
This includes self-awareness, empathy, emotional regulation, and the ability to remain composed during difficult situations. For people leaders, these capabilities can influence how effectively they handle conflict, manage the anxiety of team members during challenging periods, and absorb pressure without transferring it downward.
Communication And Interpersonal Skills
This involves outlining how the person needs to communicate with employees, peers, senior leaders, customers, or other stakeholders. Depending on the position, this may involve explaining complex information clearly, listening to different perspectives, managing difficult conversations, or collaborating across functions.
Influence And Leadership
Describe how the position requires someone to gain support, build trust, and move others toward shared objectives. For leadership positions, this can include setting direction, motivating teams, managing competing priorities, and creating alignment around business goals.
Intellectual Ability
This includes the cognitive bandwidth to handle increased complexity, learn from new experiences, consider multiple perspectives, and remain open to alternatives before settling on a solution.
Strategic And Cultural Alignment
When choosing successors for C-level and executive positions, assess whether candidates can lead in line with the organization’s vision, purpose, and values, in addition to the strategic and functional capabilities required for the role. The Winter 2024 Fortune/Deloitte CEO survey found that 88% of CEOs (61% strongly agree, 27% somewhat agree) considered company vision important when selecting potential successors.
Step 3: Objective Assessment
You can leverage the success criteria established for each critical position to evaluate which employees demonstrate the potential to meet those requirements. Validate your assessment with multiple sources of objective evidence.
A single manager’s perception can provide useful context, but it may not capture how a candidate performs across different situations or with different stakeholders. Using consistent assessment criteria and multiple sources of evidence gives decision-makers a more balanced view of a candidate’s strengths, development needs, and suitability for future responsibilities.
Some of these assessment methods include:
Performance Reviews
Use appraisals, assessment cycles, Key Performance Indicators (KPIs), and competency ratings to understand how a candidate performs in their current role. Performance data provides a starting point, but it is backward-looking and does not measure potential or readiness for the next level.
Behavioral Interviews
Ask candidates to describe how they handled specific challenges in the past, rather than questioning them about hypothetical scenarios. Probe what the individual thought, said, and did during a high-stakes crisis point to assess their real-world competencies and how they make decisions under intense pressure.
360-Degree Feedback
Gather feedback from managers, colleagues, direct reports, and the employee against the same competencies to identify consistent strengths, blind spots, and behavioral patterns. Feedback from juniors provides insights into leadership style, emotional intelligence, and ability to inspire and develop others. Peers and cross-functional colleagues can provide insight into collaboration, conflict management, and how an employee manages horizontal relationships without formal authority.
Use The 9-Box Grid To Consolidate Findings
The 9-box grid is a talent management framework that combines the evidence gained from performance reviews and behavioral evaluations. It gives organizations a clear snapshot of where their talent stands today and where it could be tomorrow. The horizontal (X) axis indicates performance, whereas the vertical (Y) axis shows potential. The value of the 9-box grid is that it connects assessment findings to appropriate development decisions, rather than simply placing employees into categories.
Here’s what each box means:
- Stars: These are the primary succession pipeline candidates, who might deserve executive visibility and targeted development opportunities
- High-Potentials: They show potential to move intro senior roles but need to strengthen their current performance through targeted skill development
- Dysfunctional Genius: These employees have the potential but something is blocking performance. It could be the wrong role, a mismatched manager, or personal circumstances
- High Performers: They meet or exceed their performance targets. Although they may not move into executive roles, they can take on more complex responsibilities
- Core Players: These employees provide consistent value and form an integral part of the organization’s talent base. They should be recognized for their contributions and given opportunities to develop further
- Up-Or-Out Dilemma: The employees’ performance is below expectations in their current role. They can be provided targeted coaching for 6-12 months, then reassess their progress to determine whether improvement, reassignment, or another corrective action is appropriate
- Workhorses: These individuals are highly skilled and consistently deliver excellent results but are unlikely to move into leadership roles. They should be recognized and rewarded for their contribution while continuing to excel in their current role
- Solid Specialists: They reliably meet expectations but perform at a more moderate level than Workhorses and have limited potential for growth. It is recommended to recognize them for their consistent performance and give them opportunities to grow within their current role
- Underachievers: Their performance is below expectations with limited growth potential. You can set clear improvement goals and milestones, then determine the appropriate next step based on progress
Once the assessment findings have been consolidated, conduct a skills gap analysis to evaluate employees’ existing skill sets and identify areas where additional training or support might be needed.
Step 4: Build Development Pathways
With development needs identified, the next step is to create tailored development pathways that prepare potential successors for their future responsibilities. This should begin with an honest and candid conversation with each potential successor about their career aspirations, interest in the position, and willingness to take on greater responsibilities. The primary goal should be supporting their distinct career pathways and enabling them to reach their full potential.
Use targeted development experiences based on the challenges, competencies, and skills required for the position. DDI’s Global Leadership Forecast 2025 report states that organizations that implement five or more development approaches are 4.9 times more likely to experience improved leadership capabilities within their workforce. Hence, combine methods such as delegation, mentoring, and stretch assignments to build and observe different capabilities. Key approaches include:
Delegation
Use delegation to help potential successors prepare for taking on responsibilities beyond their current scope. Delegation empowers team members, so they take ownership of their work and develop the confidence to contribute their unique talents and perspectives to attain a goal. It also gives senior management access to crucial performance data and insights into how an individual owns an initiative or performs and behaves under pressure, which can help them assess the suitability of the candidate.
Mentoring
Pair high-potential employees with seasoned leaders who can share their experiences, practical knowledge, and best practices to help them navigate real-world situations. Mentoring programs will allow successors to learn by observing leaders navigate high-stakes scenarios such as client negotiations, crisis handling, and board presentations. Noting mentors’ behavior, body language, and emotional regulation during these situations can provide context that formal training may not capture.
Coaching
Use coaching to transform the mindset of potential successors. One-on-one coaching programs can address four concerns:
- It helps lower the fear of losing one’s identity or purpose
- It can relieve the pressure to replicate or outperform the predecessor
- It could reduce the anxiety associated with changes in responsibility
- It helps build a personal leadership brand by defining their leadership approach and identity that reflects their strengths and values
Leadership Simulations
Use cross-functional projects, complex initiatives, stretch assignments, and high-stakes presentations to observe how candidates apply their analytical skills beyond their current expertise. These experiences can show whether potential translates into performance as complexity and responsibility increase. The project outcomes and observations of leadership behavior also become vital evidence in defending the selection of a particular individual, making the decision data-backed.
Step 5: Determine Readiness And Match Successors To Roles
The next step is to determine how soon each candidate could realistically take on the position and where they fit within the succession pipeline.
You can categorize potential successors in the following three groups:
- Ready Now: These candidates have demonstrated most of the capabilities required for the position and could assume the responsibilities with limited additional preparation
- Ready Soon: Employees who demonstrate strong potential but still have identifiable gaps in experience or capabilities. They might be able to step into the position within the next 1-3 years. Review their progress regularly to ensure they are receiving the development and exposure needed for the role
- Longer-Term Potential: Team members who may have the potential to eventually take on a critical position but who require more significant development. Place them on longer-term development pathways and reassess their progress as their capabilities and experience evolve
Additionally, if no internal candidate can realistically meet the requirements within the necessary timeframe, your organization may need to expand the internal talent pool or consider hiring external candidates
Step 6: Ensure Sustainability And Scalability
Creating a succession planning system is not the end of the process. As business priorities, organizational structures, and employee capabilities change, the succession pipeline should be reviewed and updated to ensure it continues to reflect the organization’s current needs.
Key metrics that show real impact include:
- Number of successors for each critical role
- Internal promotion rates
- Time required to fill key leadership positions
- Employee engagement scores
- Team performance scores
- Retention rates
Where relevant, organizations can also track business outcomes such as customer satisfaction, productivity, or cost savings to understand whether leadership transitions are affecting overall business performance.
Succession planning should become an ongoing organizational capability rather than an annual initiative. The process must integrate directly with daily performance management so businesses connect talent development to business needs and outcomes.
Even a well-designed succession plan can fall short if organizations overlook how candidates are selected, developed, and evaluated. Avoid these common pitfalls to build a more reliable talent pipeline and make better succession decisions:
- Focusing on the person occupying the role rather than the role itself
- Deciding on a successor before evaluating multiple candidates
- Confusing high performance with leadership potential
- Relying solely on subjective assessments or familiarity
- Failing to transfer critical knowledge or document best practices
- Providing development experiences that do not address specific capability gaps
- Ignoring candidate readiness against specific role requirements
- Treating succession planning as a one-time exercise
Avoiding these mistakes requires organizations to keep candidate assessments, development plans, and readiness information structured and up to date. As the succession pipeline grows, managing this information manually can become difficult. Succession planning software can centralize this information and help organizations maintain a consistent process across multiple roles and candidates.
The software can also support diversity and inclusion initiatives. It provides objective evidence that helps decision-makers compare candidate strengths, identify development gaps, and evaluate readiness without relying on individual judgment alone. This can support broader candidate consideration and targeted development planning.
Succession planning goes beyond developing a strategy to replace key leaders. It comprises building a culture, infrastructure, and approach that proactively prepares the entire business for change and evolution. It also ensures the organization’s vision, values, and objectives remain enduring regardless of the face attached to a certain role.
For a succession plan to be successful, organizations should build leadership continuity by decentralizing their pipeline. Managers and team members at every level must be empowered to identify and nurture emerging talent.
Broader succession planning efforts help create a more agile workforce by embedding leadership growth into the day-to-day processes of the business. Ultimately, this approach can strengthen your workforce as a strategic asset and support long-term business resilience.