A 2014 study by Stanford University School of Business found 46 percent of companies surveyed had a succession plan in place, but only 25 percent had a ready pool of successor candidates.
And, it’s even worse in the public sector, where 30-40 percent of the workforce is predicted to retire in the next decade and only 2 percent of recent graduates plan to enter the public sector. Despite the dismal future employee outlook, most studies of public sector succession planning have found that only 25 to 30 percent of organizations have a formal plan in place.
In organizations that do have a plan in place, there is a lack of consensus between managers and the workforce about the knowledge and skills it takes to fill top-level positions in the organization.
Failing to establish a succession plan could lead to catastrophic failures of service, failure to collect taxes or other fees, and organizational dysfunction that might take months or years to fix. With tight budgets, a dwindling workforce and more urgent matters at hand, most managers are hard pressed to find the time to do something that seems so far down the road. It doesn’t have to take extensive time, energy or funding to plan for the future and safeguard institutional knowledge.
Have we been looking at succession planning the wrong way?
Most organizations look at succession planning as a vertical ladder, where managers identify and train employees who will eventually fill their spot when they retire. While it is still important to identify and mentor promising employees, this method of succession planning usually is focused on the C-suite and any number of unforeseen circumstances can turn the entire plan on its head in an instant.
Maybe it’s time to approach succession planning on the horizontal plane.
Horizontal succession planning is the element that protects institutional knowledge across the organization, provides cover if a plan fails — for example if the heir apparent takes a last-minute position with another organization — and allows for seamless transitions at all levels of the organization.