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Why Have a Formal Succession Plan?

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Mon Mar 01 2010

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The new ASTD/i4cp research report titled Improving Succession Plans: Harnessing the Power of Learning and Development takes a deep look at succession planning- the process organizations use to identify the key positions, candidates, and employees needed to meet both the short-and long-term challenges inherent in conducting operations. The report also investigates the processes that encompass companies' efforts to develop and advance selected employees in the succession pipeline.

Although many organizations acknowledge the importance of succession planning for leadership roles and other vital positions, less than half of those surveyed (45 percent) said their organization had a formal succession planning process in place. Nevertheless, just over half the respondents who didn't have a formal planning process noted that their organizations currently do have informal succession plans, with only about two-fifths having plans to create a formal process in the future. These results highlight that many companies are not planning for succession in an organized and efficient manner, which could lead to a loss of benefits gained by its effective management. Companies that have formal succession plans scored much higher on the Succession Planning Success Index, (an index that assigns a score in terms of an organizations' succession planning effectiveness) than those that do not.

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If utilized effectively, formal succession planning can be extremely beneficial for organizations. The study revealed the most-cited reason (87 percent) that organizations plan for succession is to identify and prepare future leaders. The second-largest contingent (74 percent) said succession planning was to assure business continuity. These results demonstrate that for many organizations, succession planning is predominantly about the future health of the organization. However, long-term survival is not the only rationale for succession planning. Creating opportunities for internal advancement is a motivating factor for nearly two-thirds of respondents. Additionally, addressing projected talent shortages and aiding retention were also cited by more than half of the respondents.

Members can download their complimentary copy of the report from the store.

For more information on succession planning consider attending the Succeeding in Succession: Putting Five Talent-Development Principles into Practice session, at the ASTD 2010 International Conference and Exposition!

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