Business leadership and succession planning: How to foster leaders from within

Good leadership and succession planning are some of the most critical ingredients to any business. The people who drive, strategize, and manage your organization are the people responsible for its successes and failures. Yet, many organizations rely on finding business leadership externally.

Finding and hiring good leaders is one of the most expensive and time-consuming processes undertaken by HR. In addition, hiring a leader who was successful in any role in another company doesn’t necessitate their success inside your own. Good leaders are made, not hired. Working to promote and develop promising candidates from within your own ranks will greatly increase the quality of leadership and culture.

Developing your own leaders from within the organization helps to reduce the total cost of hiring, cut leadership pipeline gaps, and ensures that new managers understand the organization and its culture.

Businesses need good leadership

No matter what challenges your business has, the bottom line is that it needs to improve results, whether it’s sales, networking, hiring or anything else in the business realm.

Trimming costs, reworking business processes, and even reducing your workforce are all things you can do to help your company improve its results. However, these are tactical tasks that can only be used for so much. To see consistently positive results, focus on improving productivity. Your team’s contribution to business success will be directly related to how engaged they are with the business and their jobs.

Employee engagement will affect the extent to which employees genuinely want to do well in their jobs and help their organization achieve its desired results. It affects their discretionary efforts or how far they are willing to go beyond their job responsibilities in order to help their organization. When employees are motivated enough to give discretionary efforts (without feeling pressure to do so from the company), that’s when you’ll see their best possible results.

Good business leadership, trust in leadership, and job fit are some of the most important factors in driving and fostering engagement.

What factors contribute to employee engagement?

• Benefits – These include salary, health benefits, and bonuses. However, the motivational force behind bonuses only lasts until your employees receive (and spend) it.
• Environment – It’s hard to improve employee engagement if their work environment is oppressive or boring. Try to inspire innovation in your office environment with a few creative tweaks.
• Relationships – Employees with good office relationships are more likely to enjoy their jobs and stay with the company. Good, productive relationships help keep employees invested in the welfare of the company, whereas negative relationships could cause disengagement.
• Job satisfaction – Employees with jobs that fit their personality, spark their interest, and suit their skill sets will be engaged simply because they enjoy what they do. If they are capable of doing something they love, engagement will follow.
• Leadership – Managers and leaders are critical to employee engagement. Even if an employee has good benefits, work environment, relationships, and job satisfaction, a bad leader can sabotage employee engagement. 

Job fit depends on an employee’s ability to meet the skill requirements of a job, the match between an employee’s behaviors and the position, and the interest an employee has in doing the job. If there is a bad job fit, good management is impossible. In order to be a good leader, you need to make sure all your roles are filled by the right people.

“Look at any organization enjoying spectacular success, and what do you find they all share in common, besides their products or technology (which is potentially duplicable)? THEIR PEOPLE. Spectacular success is built upon the ability of the leadership of an organization to engage the people who work for the organization — on a much higher level than their competitors can. High levels of employee engagement have been shown not only to contribute enormously to the organizational bottom line, but it’s also an almost unbeatable competitive advantage.” Deiric McCann, co-author of Leadership Charisma.

Good leadership is critical for building trust, which also integrates into how people stay, and work, with your organization. 

Trust is most easily established by creating close and personal connections, closing distances, and making everyone feel like an equal contributor. While this isn’t always possible with remote workers, taking the time to close perceived or actual physical distances is an important aspect of leadership. 

If you have gaps in leadership or, worse, bad leaders step into the role because you don’t have anyone prepared, all of that goes away.

What happens when you have good leadership?

Great leaders are an asset to any organization for the influence and effectiveness they inspire. When your leaders act with the right skills and use good techniques to make an impact, the results shine through in your organization’s culture.

Leaders should be able to establish a clear vision throughout the company, communicate seamlessly, and resolve conflict well.

1) Team members have the right attitude

The best managers lead by example and demonstrate professionalism, accountability, focus on detail, and honesty. They also reward their team members when they demonstrate those attitudes, encouraging preferred responses in different situations.

2) Teams have a shared vision

Good leaders clarify expectations for productivity and results. They communicate the value of individual work and align employees’ goals as they realize how their roles contribute to larger organizational goals.

3) Employees don’t shirk from accountability

Great leaders understand the value of accountability. They accept blame when things go wrong, instead of pinning it on an employee down the line.

This behavior should be reflected in your employees. If they make a mistake, they will acknowledge it immediately and try to fix it rather than trying to hide and hope no one will notice.

4) Teams are motivated by and interested in their work

Employees are motivated by their work when good leaders maintain good working relationships with them and understand their intrinsic drivers. Good leaders keep an eye out for causes of dissatisfaction and act quickly when something drains team morale.

5) People work together and eliminate redundancy

When you have one successful business unit, sometimes you get another trying to duplicate their efforts from scratch instead of building on what that initial team has already achieved.

The same is often true of internal processes in smaller companies. A successful digital ad will likely never be repurposed for use in video, print, or any other medium. Instead, the people responsible for building those products will simply create something new or work out how to get there from the ground up.

This process of ‘rebuilding the wheel’ is one of the organizational problems which social leadership works to circumvent. By bringing employees together and encouraging them to collaborate, good leaders can build cost-saving instances of sharing and co-creation.

6) Leaders invest in social leadership

One of the most difficult aspects of social leadership is managing priorities. Task-based leadership is often focused on accomplishing and achieving specific tasks. This can be beneficial in some roles and counterproductive in others. Social leadership prioritizes total goal accomplishment, personal development, and customer satisfaction. This enables or even empowers employees to do things in new ways, because they aren’t bound to completing specific tasks. This then boosts overall productivity over time.

What is succession planning?

Succession planning is the process of using a series of recruitment, talent development, and promotion to replace business leadership and key employees as they move out of their roles. Good succession planning takes a long view of factors like turnover, death, retirement, and promotion, working to ensure that new candidates are ready to step into those important roles as they’re emptied. 

The end goal is to create a leadership or talent pipeline for smooth transitions of responsibility and power. If new people are prepared and ready to step into roles, those transitions can happen with little to no disruption when those inevitable changes occur. 

This normally falls on the Human Resources, or HR, department, which manages succession planning through a combination of internal development, coaching, recruitment, and strategy. 

Having a good policy in place means you have the tools to pinpoint the traits and competencies that make up a good leader, what is needed to fill a specific role, and then to identify the employees with the right skill sets and talents to fill those roles — or to determine and create a pool of external candidates for them. 

Most importantly, it gives organizations time to prepare candidates, not just by offering training, but by introducing them to different roles, building work experience across the organization, and even allowing them to take on the role guided by the person they will eventually replace.

Having a succession plan means candidates can have their strengths and weaknesses evaluated and remediated, and be given support in areas that could be problematic once they step into the role. 

While succession planning is most often used in C-suite level business leadership, it’s valuable for any key role. If a role is critical to the company’s success, you need to have a successor in place. Organizations like Facebook actually ask their employees to have successors in mind. That sort of policy is extreme but is an example of how talent management can work into organizations at every level. 

Why succession planning

Succession and development planning helps you to identify, train, and improve the people already in your organization. There could be a leader sitting right in front of you — someone who’s never been given the chance to reach their maximum potential in the company. Assessments, training, and development can help you find them.

The starting point is always quality hires. Whether they’re fresh graduates or highly experienced, their attitude and their ability to learn and to fit into company culture is what’s important. From there, succession planning allows you to spot future role potential and offer training and opportunities to grow into leaders: from seminars and workshops to job experience and coaching.

Employee training and development benefits every organization. No matter your industry, your power is in your people. And if people know they have room to grow, the tools to perform their jobs, and the opportunity to improve and succeed, they will be that much more invested in your organization.

Plus, if you continually train your employees, you will have a pool of qualified applicants to fill positions of leadership when the company needs them. Once you begin investing in your human capital, you will find that continual employee development leads to higher productivity, reduced turnover, increased efficiency and financial gains, and decreased need for supervision.

In the end, you will have a company filled with leaders — skilled, qualified, and dedicated employees who will be valuable, irreplaceable assets — all you have to do is keep investing in them.

Benefits of succession planning for business leadership

Developing an internal leadership pipeline is crucial for filling gaps, scaling, and ensuring that new leaders will meet the needs of your organization. This is especially important for coaching roles, where candidates need more than just leadership ability but a high level of emotional intelligence, adaptability, and a willingness to teach and learn on a one-on-one basis, rather than simply guiding their team or branch.

Here, you can choose to select new leaders internally or externally, but internal development will give you more control over the skills, behaviors, and competencies of the individuals in your environment.

• Succession planning saves time and money on filling roles when they empty.
• A succession pipeline means you can curate the skills and competencies for creating success in a role.
• Curating internal talent reduces the need to invest in external people — in a highly competitive business leadership market.
• Creating career and development opportunities inside your organization boosts employee engagement and can reduce turnover.
• Promoting internally improves your reputation as an organization that takes care of its people, which can improve candidate pools.
• Business, and management, transitions become more seamless, reducing cost and disruption.
• Existing key people can transfer their expertise through coaching and mentoring, keeping valuable knowledge inside the organization.
• Management can identify and make the most of employees’ potential to maximize the value of hires.

What does a good succession plan look like?

Depending on the size of your organization and its goals, your succession planning can take many forms. However, in every instance, you need a process to recruit, select, and train future leaders. That includes having tools and processes in place:

• Mapping key roles and leadership positions to determine which ones need successors
• Assessing turnover rate and rate of needing successors
• Using competency frameworks and assessments to map what good leaders bring to their roles. Most role assessment should start from competencies and core skills for the role – so you can look for people who have the attitude, personality, and soft skills to fit the position. Hard skills can always be trained in.
• Assessing potential in existing employees and ascertaining how they match (or don’t) to necessary roles
• Assessing which roles should use internal talent and which are a better fit for external talent
• Creating a development process to help employees build the experience, skills, and competencies needed to excel in leadership positions for example, experiential development and job shadowing, cross-functional experience, and coaching
• Tooling to manage employee competencies, development, and progress
• Stakeholders who are involved in the process for example, by mentoring a future successor
• Regular feedback to the candidates on progress, development, strengths, and weaknesses
• Individual development plans to deliver the necessary support to gain required skills through mentors, job rotation, and so on
• Trial runs, in which potential successors can assume responsibilities and learn how to handle the job

Setting that up can take time and investment. And it’s certainly a lot more than integrating digital learning and highlighting a talent pool. However, it will pay off in terms of reducing the total investment in new employees.

Mapping good business leadership

Good business leadership is often less about hard skills and more about soft skills such as communication and adaptability. You can always train in specific hard skills and experience.

Assessing competencies and performance in coaching roles will enable you to develop success profiles for those roles so that you have a picture of what good work looks like in that role.

Here, you should work with external assessment centers, which can merge their own external research with internal surveys to determine which behaviors and characteristics are needed in your specific roles, and for coaching.

You should look for factors such as:

• Willing to learn
• Communicative and outgoing
• Self-motivated
• Empathetic
• Adaptable and creative
• Able to build rapport and trust
• Able to communicate ideas well
• Good at their role and able to learn.

Creating performance models in this way identifies which traits or behaviors are trainable and which are more difficult to train, and allows you to assess how existing employees align with those models.

1) Communication

Most business leadership is about communication and that often boils down to charisma. Being a charismatic leader results in engaged employees, increased productivity, and positive results.

Deiric McCann, co-author of Leadership Charisma, explains how charisma affects leadership in the workplace, inspires good communication, and builds a seamless workforce of dedicated employees.

“In our research (400,000 employees rating 40,000 leaders worldwide), more than 40 percent of what we – as employees, shareholders, or readers – perceive as charisma is good communication. Think of any truly charismatic leader you know or have ever read – what do you remember? Their extraordinary communication ability (think ML King, JFK, Gandhi, Steve Jobs, etc.).” 

Leadership charisma is essentially good communication — a blend of soft skills and traits that allows leaders to: 

• Create and maintain a work environment in which people are emotionally and intellectually committed to the organization’s goals 
• Instill an energetic and positive attitude to inspire employees to do their best for the organization 
• Create a common sense of purpose, where people are engaged and are inclined to invest energy, and even some of their own time, in their work. 

That’s the definition of the best sort of employee engagement, and it’s achieved on a long-term basis by good business leadership. If you can engage your people on this sort of level, then they will give their whole hearts and souls in the service of your shared vision — helping the organization achieve its results.

In one of the biggest studies on the topic (involving more than 90,000 employees in organizations in 18 countries worldwide), companies with such highly engaged employees achieve, on average, 51 percent more operating income than similar organizations with disengaged people, and 39 percent more earnings per share than those with disengaged people.

For example, research shows that people are very motivated and engaged by leaders who:

• Have an ambitious vision that they communicate clearly
• Take the time to demonstrate to their people what’s in it for them if they help the leader achieve that vision
• Are interested enough to know the concerns of their people, and make great efforts to help them deal with those concerns
• Help their people become the best they possibly can — both personally and in a career sense.

The key factor in leadership is a genuine concern that people get as much from the relationship with the organization as the leader, their board, and the shareholders. That’s what genuinely motivates people!

The moment an employee senses that their leader is less interested in them and their objectives/welfare than the employee is in the organization’s objectives, engagement begins to leak away. So, even a neutral leader can tarnish a brand image — by simply getting poorer results than those achieved by their peers in high-engagement organizations.

Of course, an actively negative leader will drive employees to become vocal outside of the workplace, which could have a negative impact on brand image.

Anyone who develops and works with the behaviors that drive leadership charisma will attract and motivate people to follow them, regardless of whether they have formal authority.

It is important that organizations stay alert and ensure they remain open to identifying and recruiting such ‘leaders in the making’ so they can put such individuals into positions where they can develop as future leaders and engagers of employees.

2) Emotional intelligence

In 1995, Daniel Goleman brought emotional intelligence to business, with a book of the same name. His theory, which was rapidly adopted by businesses across the United States, was that understanding your and others’ emotions was a valuable and even necessary skill for leaders and people management.

He hypothesized that a good leader must show emotional intelligence through five traits: self-awareness, self-regulation, motivation (passion beyond money and status), empathy, and social skills.

Armed with these five emotional skills, a leader could surpass those showing any level of technical skill or intelligence by guiding employees, building bonds with those they’re working with, and establishing better trust and communication.

Why? Leaders have to guide and move people. Being good at what they do is not enough to motivate and inspire others. Emotional intelligence bridges that gap.

While emotional intelligence has traditionally been difficult to measure, competency frameworks give you the tools to recognize which behaviors positively influence a role, and how they do so. By creating a framework of what success looks like in a role, you can actively measure when leaders are fulfilling those obligations.

• Self-awareness
• Self-management
• Emotional self-control
• Adaptability
• Achievement orientation
• Helping others to succeed
• Positive outlook
• Empathy
• Organizational awareness
• Influencing others
• Coaching and mentoring
• Conflict management
• Teamwork
• Inspiring others
• Leadership

Good emotional intelligence is critical to ensuring good communication and good leadership.

3) Strong ethics

A leader with strong ethics can a) adhere to strong moral standards, making choices based on an ethical code to follow company procedures and policies, b) follow the law, and c) make choices based on empathy. In real life, a strong ethical code results in leaders who follow the rules, respect the emotional safety of their employees, and work to build others up.

This enables a leader to build a safe environment where employees understand that they will be treated fairly and can therefore trust their leadership.

4) Empowering self and others

Empowerment ties into motivation and direction — giving others the tools and motivation to perform well in their jobs. This directly benefits any organization, because no matter how technically skilled the leader, they are wasting resources if they are trying to do everything themselves.

Motivated teams that understand they have the tools and resources they need are also more productive and proactive, and have more job satisfaction.

What does empowering self and others look like on the job? A leader demonstrating this skill allows employees to self-organize, provides insight and guidance where necessary, and empowers others to do their own work rather than taking it all on themselves. What else? They’re openly working to apply the same standards to themselves.

5) Open to new ideas

Being open to new ideas ties into several leadership competencies: flexibility to change, willingness to learn, providing room for trial and error, and willingness to adapt to new technologies and ideas. This means being open to admitting that you’re wrong, accepting ideas from unlikely sources, identifying and working to correct employee ‘tunnel vision’ or an unwillingness to learn or problem solve, and withholding judgment until hearing or experimenting with all the options.

Why? Taking an active problem-solving approach, whether to technology, tasks, or employees, is crucial to adapting to an ever-changing digital world.

Building new techniques and options requires a certain ‘fail fast and forward’ mentality, where leaders are encouraged to try new things, test, and allow small failures with rapid feedback and correction.

This not only encourages teamwork and collective knowledge but improves the overall capabilities of the organization.

6) Nurturing attitude

Workforce management is a valuable part of any organization, and any leader should be able to nurture those under them. A leader who is committed to helping employees do and become their best by improving their competencies and skills, nurturing future leaders, and building loyalty and motivation adds value to an organization.

This means that a good leader must be able to mentor and coach, recognize where people are succeeding and failing, and motivate individuals to improve.

7) Strategic thinking

Strategic thinking is the driving force behind company growth and development. This competency includes being able to analyze the current situation; align the tasks with set goals in order to achieve the required result; manage budget, resources and timeline; and establish efficient practices.

And because strategic thinking is aimed at the company’s future growth, this competency is obligatory.

Without the ability to strategically think and plan, the leader won’t bring value to the company because this is what differentiates an average employee from a leader. An employee usually performs only their own set of tasks without going further than that. A leader, on the other hand, is genuinely interested in contributing to the company’s development and therefore has to face the future and think long term.

8) Conflict management and resolution

Successful conflict resolution is an essential skill for any leader. Unfortunately, workplace conflict is inevitable. Therefore, a good leader should be able to efficiently manage and resolve conflict without hurting the work process, the company, or the employees.

Conflict management includes:

• Listening
• Seeing the whole picture
• High EQ
• Efficiently communicating with employees and encouraging them to communicate with one another
• Not passing judgment before hearing both parties

A leader usually has double responsibility during conflict resolution. Not only will their decision affect the company, but it will inevitably leave one of the parties dissatisfied with the outcome. Therefore, the primary concern is to minimize the effect of the conflict and strive to create a win-win situation for all parties.

9) Decision-making

Another critical competency for any good leader is decision-making. From task assignment to decisions that may impact the company’s well-being, a leader should be able to make rational and unbiased decisions that will bring value to the company.

Decision-making comprises many skills: finding, perceiving and analyzing information, listening and communicating, strategic thinking, conducting thorough research, and so on. When making a decision, a leader should always be impartial, calm, and rational, and consider all the internal and external factors at play.

The ability to make wise decisions is vital, as a leader can significantly optimize the whole working process simply by assigning the right person to the right task.

10) Good time and priority management

If someone meets all of the points in your performance model except time and priority management, they likely won’t be a good candidate.

While you can train both aspects in, an individual in a coaching role needs to be able to manage their time and priorities so that they make time for coaching. Even if they’re largely coaching new hires, they have to see it as much a part of their job as their day-to-day work.

Once you’ve chosen internal candidates, you can begin to prepare them for their future role as a coach with direct training, by broadening their experiences outside of their specific role and exposing them to other coaches.

Clearly communicating expectations, what good coaching looks like, and performance guidelines for the role are also important, especially once new leaders are moved into their coaching roles.

11) Ability to switch priorities

One of the most important bases for choosing a leader for promotion is their ability to adapt to new responsibilities. In technical roles, individuals are responsible for completing their work.

When they become a leader, they’re responsible for helping others to complete their work. Making this massive switch in mindset requires significant adaptability, meaning that not everyone can make the shift.

Coaches add value to organizations in dozens of ways. They encourage key people, build skill sets, and help people to solve their own problems and manage their own growth.

This applies both when you’re building coaches as a role inside your organization and when implementing coaching as a responsibility of leadership. Choosing leaders who already have what it takes to be good coaches will help you in this goal.

12) Teamwork

Last but not least is the ability to work in a team, but this competence consists of several behavioral indicators that help identify a true leader.

Working in a team not only means collaboration but also the willingness to display initiative, introduce new and efficient practices and methods to optimize the work process, and organize and manage tasks and resources. A leader has to keep an eye on the atmosphere and ensure that team members feel comfortable and there’s no tension among them.

Finally, being part of a team, a leader should be able to take responsibility, recognize and acknowledge team members’ achievements, and inspire others by their own example.

Tip: Leaders fit into multiple styles

While it can be tempting to create a single leadership competency framework, there are many types of leadership styles in business. As an example, you need different types of leaders running branches and departments than you do running teams, creating business strategy, and so on. 

Of course, most good business leadership also requires navigation between the different styles and choosing a way to lead that fits the situation. 

• ‘Laissez-faire’ leadership – This leadership style acknowledges that employees are good at what they do, and leaders should work to enable rather than intervene in work. 
• Democratic – Democratic leaders consult with teams and take their opinions into account, actively encouraging dialogue and participation in leadership and decisions. 
• Transactional – People are rewarded for their performance and are primarily encouraged to meet objectives, which the leader facilitates with structure and guidelines. 
• Transformational – The leader uses communication to enable, inspire, and encourage participation in the organization.
• Situational – These leaders know more than one leadership style, adapt it to the situation at hand, and use different managerial styles where appropriate. 

If you know what type of leadership style best suits your role, you can look for that, or train for it.

Building Your Business Leadership and Succession Framework

Competency frameworks are crucial to recognizing the factors that make up good performance in your organization. One that includes leadership will allow you to spot leadership potential by looking at behavior and ability to learn rather than skill sets.

Conduct a talent review: 

• Identify ‘high-risk’ roles
• Determine who is likely to leave within the next year
• Decide whether you can fill their roles from within the organization
• If so, support the development of those individuals
• If not, begin to seek candidates from external sources

Define ‘position requirements’ – Strategic positions require significantly more skills and experience than less senior roles, therefore it’s important to create elaborate position requirements. This can be accomplished using competency profiles.

Create appropriate ‘people data’ requirements – Those considered for strategic positions should be appraised in much more detail. For example, it’s recommended to look into explanations of ratings and descriptions of context. 

Plan development – Any leadership position will have unique training and development requirements. These should be tailored to the individual candidate’s specific weaknesses, based on assessments, rather than general training. 

However, it’s also important to note that many people will need direct training and development to move into different types of leadership, especially as they make the jump from technical to managerial work.

• Begin by defining the core skills, abilities, and competencies that make a role. You can do so with interviews, assessments, and performance reviews to see what success looks like in the role 
• Assess competencies regularly to see who stands out 
• Use 360-feedback to highlight those who are liked, respected, and show strong leadership potential
• Create triggers that highlight potential and success for HR or HRM to follow up on 
• Leverage digital learning and easy-access training programs everyone can use to determine who’s ambitious and who wants to learn 
• Use competency analysis to determine skills gaps and offer training as the first step of leadership development 
• Implement job rotation and mentoring programs after people start to close the skills gaps 
• Use regular feedback and development as part of the process 

Once you’ve mapped key leadership skills per role, you can more easily see what someone might need to succeed in that role. From there, you can use custom development plans to get that person there.

Using job profiles

Job profiling is the process of mapping required behaviors, competencies, skills, and personality to success in a role. Creating job profile frameworks, typically with the support of a competency framework, flags specific factors such as behavior and personality that contribute to performance in a role.

Most organizations achieve these frameworks with an ‘out of the box’ solution in a framework designed on industry averages, which is then updated and tweaked to reflect unique role requirements in the organization. This second step is typically achieved through a combination of interviewing, reviewing performance results, and discussing job requirements with teams and people around the role.

Mapping assessment results to job profiles

Job profiles list a series of behaviors, actions, and skills that contribute to performance in a role. You can easily graph these results out, and then simply match individuals with similar results to see who meets the required traits. Here, it’s more important to pay attention to soft skills such as behavior and personality, which are more difficult to train.

Several types of people can often succeed (and to the same degree) in a single role. Your job profiles should encompass what success looks like and why that is success so that you can look for it in others.

Building a talent pool

Once you’ve established behaviors and competencies which contribute to success, you can begin to develop a talent pool. This means identifying high-potential employees, reviewing their strengths and weaknesses, and working to create strategies so that they and others can close those gaps and prepare for their potential new role.

This involves creating a small pool of employees who can receive leadership development, training, and even organization-sponsored education to prepare them to step into a higher role.

Many companies also benefit from offering a broader employee development program open to each individual in the company, which allows self-motivated staff to pursue learning and new roles. This removes some of the need for advanced evaluation and interviewing to qualify candidates for development programs — but may cost more in total to the organization.

Once you’ve determined the talent pool, you can score their competencies based on what is needed for potential future roles. Mentoring programs, developmental assignments, stretch assignments, formal training, and action learning are each extremely valuable in development planning.

A competency framework gives HR the behaviors and competencies candidates need, and allows you to put together comprehensive training to develop those with the desired qualifications and behaviors so that they are highly qualified for a role when it becomes available. In this way, organizations can ensure employee loyalty, reduce total costs, and reduce downtime because of gaps in crucial roles.

Using gap analysis to determine development direction

Employee assessments in hiring are most often used to directly match individuals to required or wanted behaviors and traits, but some of those skills will be missing. A gap analysis can help you determine what and where candidates need to improve.

If you’re planning succession and development, you should be significantly more concerned with personality and behavior traits such as personal motivation and emotional intelligence. These traits are difficult to train but greatly impact leadership and creative roles.

If someone shows great promise in areas that contribute to a role but are not necessarily hard skills, you can flag them for further development.

This process should always mean that you:

• Analyze what’s missing from the profile to completely fill out the role
• Discuss options with candidates and determine motivation and interest
• Offer development opportunities in line with the role
• Offer coaching or mentoring in line with the role
• Monitor progress and continue to map personality to job profiles

For example, if someone’s assessment profile maps to success in a role such as branch director but they lack the key skills and range of experience necessary to make good decisions — here, it would be relatively simple to set aside room for personal development, to broaden their experience in other departments or branches, and to assign them a mentor or coach who could help bridge gaps relating to personal development.

Employee development

While you will often come across fast-rising stars inside your organization, intelligence is never enough to create a good leader. It’s only the bare minimum of what they need.

Offering development opportunities such as training or additional responsibilities will help potential leaders to develop their experience and employees to improve their EQ before having to bring skills into play as a leader.

Even if you can’t offer these opportunities to everyone, your competency framework will help you to identify the right candidates based on performance, ambition, and behavior.

Formal training is an option, but assignments and job rotation are the most crucial aspects of development.

Coaching and mentoring

Coaching and mentoring are critical to a leader’s long-term success and are one of the key benefits of using internal development for business leadership. You can pair people with those who are good in the skills needed to coach them. You can also implement direct coaching towards specific leadership skills like communication, emotional intelligence, time management, and business strategy.

From there, specific role preparation tactics like job mentoring and job shadowing are highly beneficial. Allowing that person to take on all, or aspects of, that job, with the support of the person currently in post, means they gain valuable job experience, before ever having to take on that role.

Making leaders accountable

If someone moves from a technical role to a managerial position, and continues to do technical work rather than delegating, they’ll create a bottleneck and will likely serve as a bad example for their team.

Ensuring that everyone understands what their role is, and their role in recognizing and developing potential leadership candidates, will help you avoid that. It also gives leaders the means to offer coaching and mentoring to potentials.

Monitoring and measuring success

Strong measurement and management of candidate progress is crucial to ensuring success, both in developing a technical employee for a management role and for promoting management to higher levels.

Tracking behavior and performance based on what’s expected in the role they’ll move into (rather than what they’re in now) will give you a good idea of where they are and whether they’re ready or need further development before moving up.

While developing leaders from within requires a strong HR and existing leadership structure, it’s significantly more effective than hiring externally. And, by developing leaders, you control their experience, opportunities, and training, thereby ‘growing your own’ to meet your specific needs.

Hiring for succession

Not everyone will be collaborative or productive without constant management and accountability. Not everyone can communicate well long distance or through digital mediums.

A successful hire is someone who is self-motivated, engaged and interested in the organizational goals, and very good at communication. This can be ascertained through skills assessments and competency or behavior frameworks to test how well people are likely to contribute in an unstructured environment, such as working remotely or from home. Eventually, not everyone will be a good fit for succession. However, leadership skills and potential are often simply good traits for an employee.

Pros and Cons of Internal vs External Succession Planning

Hiring a leader for any type of senior position can be exorbitantly expensive. With few leaders on the market, many will find themselves deluged with offers. You’ll have to offer high in terms of compensation, environment, and interest/challenge to get anyone to consider your organization.

Developing leaders internally can be expensive as well. Investing in individual development often means training, mentoring, coaching, assessing results, using assignments to broaden experience, and continuing to follow up to ensure the individual is moving in the right direction.

Though costly, it will vary depending on the individual and the role. Internal development also means taking on risk, because if the individual leaves your organization, they aren’t delivering a return on any of that investment.

Culture fit and culture awareness

Some organizations prefer to bring external leaders in to add new insight, new ideas, and new concepts. This can be extremely beneficial in that leaders with insight and experience in outside organizations have a better view of what you’re doing and what markets are like, and bring more diverse experience to your organization. This can pay off.

Internal hires are brought up inside your organization. They know how things work, why things are the way they are, and if you’ve handled development correctly, they have a deep understanding of your organization at every level. This enables applying the Shuari principle of understanding and mastering before making changes to improve.

CEOs like Microsoft’s Satya Nadella, who has worked with Microsoft since 1992, are good examples of successful applications of using internal development for leadership pipelines.

However, it is also a risk. For example, Ron Johnson was brought to Apple, where he greatly improved processes and increased profits for the organization. Attempting to do the same thing at JCPenney, he displayed a marked misunderstanding of the organization’s target demographic and their stocks dropped by 51 percent. Internal people often don’t have external insight and might miss key flaws or bottlenecks preventing growth. And, internal hires are less likely to create the change needed.

Development path

Hiring externally means that every one of your hires will have had the chance to pursue roles in one or numerous other external companies. An external person will almost always have more diverse experience.

Developing leaders internally offers other advantages. You can optimize development and experiences to meet the needs of a role through assignments, training, promotions, leaders, and coaching. You can, in short, design what you believe is the perfect leader based on assessments and job profiling.

Internal development is a valuable strategy that can help you to develop leaders, increase the availability of candidates for roles when positions open, and improve the quality of hires. However, it shouldn’t be a sole strategy. In most cases, both have obvious pros, cons, and limitations, so a mix of the two strategies is likely to deliver the best total results.

Succession planning best practices

Getting started with succession planning can require significant investment from your organization. If you already have key factors in place, like competency frameworks and roles mapped out, it will be easier. However, you still have to invest in employees, in development, and in ensuring long-term success of the project.  

• Invest in engagement – It doesn’t matter how much you invest in employee development if employees leave the organization before moving into leadership positions. Invest in keeping employees engaged and with the company first and in developing leadership capabilities second.  
• Keep people informed – If someone is in line for succession, they should know and have the option to opt out, to invest further in education, and so on. That’s harder if you have a broader pool of candidates, but those candidates should know they have opportunities for growth and what they have to work towards.  
• Implement regular feedback – Good feedback cycles allow candidates to discuss feedback with their mentors, to work on improvement, and to ensure that everyone understands exactly where candidates are. Here, 360, spring, and other regular feedback is much more valuable than once-per-year or other traditional feedback cycles. 
• Invest in job profiles – Investing in job or role profiles helps you to map what success looks like in a role — in however many forms that happens to be — and then to train for those traits and behaviors. This kind of role mapping also enables organizations to better understand who’s qualified for what role because of overlaps or similar roles. For example, you can use a gap analysis to determine where a candidate has to learn or improve to meet the needs of the role — which you couldn’t do without first fully understanding that role. 
• Leverage competencies – Competency frameworks define what soft and hard skills are desirable in a specific role, in a team, and in the organization so the people responsible for development can more easily see what they’re looking for and what’s needed. Once you have a competencies list, you can define what competencies make good leaders in each area, and then look for those competencies first and the hard skills like project management later. 
• Deliver general development opportunities – Digital learning portals can give everyone in your organization the opportunity to invest their time in personal improvement, to increase their skill set, and to highlight themselves as ambitious and looking for more. 
• Use coaches and mentors – One-on-one coaching and mentoring can help promising candidates move into roles much more quickly, because they have the opportunity to learn from people in those roles. Here, you also want to be sure to encourage diverse experience, rather than setting someone up to be exactly the same as their predecessor. Therefore, cross-role, and even cross-organizational, experience is desirable before moving someone into an eventual leadership position. 
• Monitor and measure success – It’s not enough to offer training and development. You have to know what people are doing with it. If someone’s not making the most of the opportunities, it might not be the right time to move them up or they might not be as suited as you’d like.

Wrapping up — Invest in business leadership and succession planning for a strong, resilient company

Employee succession planning is the best way to ensure quality and continuity of business leadership. And that leadership is one of the most essential factors in ensuring organizational success.

For most businesses, ensuring continuity of leadership should be a priority. Integrating succession planning into recruitment, employee development, and even performance reviews — at every level of the organization — gives you the framework to recognize, develop, and train future leaders right inside your own organization.

Eventually, that could prove cheaper and could deliver better leaders than standard processes of hiring new leadership externally.