Succession planning process: A practical 6-step guide

Every organization depends on a handful of people who keep operations running, strategy moving forward, and clients satisfied. When one of those people leaves unexpectedly, the ripple effects can be severe—lost revenue, stalled projects, declining morale, and scrambling to fill gaps.

A succession planning process is a deliberate, systematic effort to ensure leadership continuity in key positions, rather than reacting when someone hands in their resignation, effective succession planning prepares multiple candidates for future leadership roles over the next one to ten years. This proactive approach links workforce planning, leadership development, and business strategy into one integrated roadmap.

This guide provides a concrete, step-by-step process designed for mid-sized organizations (100–5,000 employees) navigating the realities of 2024 and beyond. Common triggers making this urgent include:

• Mass retirements of Baby Boomers expected through 2030
• Rapid organizational growth requiring new leadership tiers
• M&A activity creating integration and leadership challenges
• New regulatory requirements demanding specialized expertise
• Rising turnover among high-potential employees

Here are the six steps we’ll cover in detail:

1. Identify critical and vulnerable roles
2. Build clear success profiles for each role
3. Identify and nominate potential successors
4. Assess capabilities and gaps objectively
5. Create and execute individual development plans
6. Measure, communicate, and refresh the plan

Why succession planning matters in 2024–2030

When a CEO, CFO, or key technical expert departs without a prepared successor, the consequences extend far beyond an empty office. Business operations stall while the leadership team scrambles to cover responsibilities. Client relationships built over years can erode in weeks. Competitors sense vulnerability and move aggressively.

The data reinforces why succession planning is important. Industry research suggests that replacing a senior executive can take six to eighteen months and cost one to three times their annual salary when factoring in search fees, onboarding, and productivity losses. Organizations with strong leadership pipelines consistently receive higher valuations from investors who recognize that human capital represents both risk and opportunity.

Beyond risk mitigation, successful succession planning delivers tangible qualitative benefits:

• Preserved institutional knowledge that would otherwise walk out the door with departing leaders
• Smoother client and partner relationships during leadership transitions
• More resilient organizational culture during crises (COVID-19 demonstrated the value of leadership stability)
• Enhanced employee engagement when high-potential employees see clear career paths
• Reduced recruitment costs by developing internal talent rather than relying solely on external candidates

Organizations that invest in developing future leaders send a powerful signal: growth opportunities exist here. That message directly improves retention of your most valuable employees.

For high-potential employees in their thirties and forties, a visible career path often matters more than a marginal salary increase. Effective succession planning creates those paths while simultaneously protecting the organization.

Overview of a structured succession planning process

Succession planning is a cycle, not a one-time project. The most effective organizations review and update their succession plans annually or biannually, treating the process as an ongoing investment rather than a checkbox exercise.

The same planning process can apply to a single role (such as CEO succession) or an entire leadership tier (such as all directors across a region). What matters is consistency in approach and commitment to execution.

Here are the six core steps this guide will cover:

1. Identify critical and vulnerable roles — Determine which positions would cause significant harm if left vacant
2. Build clear success profiles — Define what “great” looks like for each role over the next three to five years
3. Identify and nominate potential successors — Build a bench of multiple candidates per critical role
4. Assess capabilities and gaps objectively — Compare candidates against success profiles using structured methods
5. Create and execute individual development plans — Turn succession planning into focused development action
6. Measure, communicate, and refresh — Track progress with clear metrics and regular reviews

Time horizons typically fall into three categories:

• Emergency cover (0–6 months): Who steps in immediately if someone leaves tomorrow?
• Near-term (1–3 years): Who could be ready to assume the role with targeted development?
• Long-term (3–7+ years): Who represents the next generation of potential leaders?

Step 1: Identify critical and vulnerable roles

Critical positions are roles whose vacancy would significantly harm strategy execution, revenue generation, regulatory compliance, safety, or organizational reputation. These aren’t necessarily the highest-paid roles—they’re the roles where a gap would cause disproportionate damage.

Vulnerability adds another dimension to the analysis. A role becomes high-risk when it has a single incumbent with no backup, a known retirement timeline (watch for leaders turning 60–65 by 2027–2030), elevated turnover risk due to market demand for the skills, or specialized expertise that’s genuinely hard to hire externally.

How to identify critical roles practically:

Start by pulling your organizational structure chart and reviewing all positions above a specified level—typically managers and above, plus highly specialized individual contributors. For each role, ask:

• If this position became vacant tomorrow, what would break?
• How long would it take to find a qualified replacement?
• What revenue, compliance, safety, or strategic initiatives depend on this role?

Examples of critical roles across different functions include:

Function	Example Critical Role	Why It’s Critical
Operations	Plant Manager	Direct accountability for production output and safety
Tecnología	Head of Cybersecurity	Protects organization from existential threats
Finance	Lead Actuary	Regulatory compliance and pricing accuracy
Sales	Regional Sales Director	Owns major client relationships and revenue targets
R&D	Head of Product Development	Drives innovation pipeline and future revenue

Use a simple 2×2 matrix to categorize roles:

• High Criticality + High Vulnerability: Immediate priority for succession planning
• High Criticality + Low Vulnerability: Important but less urgent
• Low Criticality + High Vulnerability: Address through standard talent management
• Low Criticality + Low Vulnerability: Standard workforce planning applies

For your first cycle, prioritize the top 10–25 roles rather than attempting to cover the whole organization. You can expand scope in subsequent years.

Step 2: Build clear success profiles for each role

Success profiles go beyond traditional job descriptions. While a job description lists duties and qualifications, a success profile specifies what “great” looks like in the role over the next three to five years, accounting for where the organization is heading strategically.

Key elements of a success profile:

• Purpose of the role: Why does this position exist? What value does it create?
• Core responsibilities (5–7): The essential accountabilities, not an exhaustive task list
• Measurable outcomes/KPIs: Specific targets that define success
• Technical skills: Hard skills and domain expertise required
• Leadership competencies: Behavioral capabilities needed at this level
• Required experiences: Previous roles, projects, or exposures that prepare someone

Example: Success profile for chief financial officer

Element	Description
Purpose	Lead financial strategy and operations to support sustainable growth and stakeholder value
Core Responsibilities	Financial planning and analysis; capital allocation; investor relations; risk management; compliance oversight; leadership of finance team; strategic partnership with CEO and Board
Key Outcomes	Achieve 15% revenue growth while maintaining EBITDA margins above 20%; maintain investment-grade credit rating; zero material audit findings; 90%+ retention of high-performing finance staff
Technical Skills	GAAP/IFRS expertise; M&A due diligence; capital markets; enterprise risk management
Leadership Competencies	Strategic thinking; executive presence; cross-functional influence; talent development; decision-making under ambiguity
Required Experiences	P&L ownership; led a major acquisition or divestiture; managed investor relationships; built or transformed a finance function

Align success profiles with your organization’s strategic objectives. If digital transformation is a priority, success profiles should reflect digital fluency. If international expansion is planned for 2028, relevant profiles should include global experience or cross-cultural leadership.

Who should validate success profiles:

• Current incumbents (they know the role’s real demands)
• The incumbent’s manager (they set expectations)
• Human resources or talent management (they ensure consistency)
• Senior leaders with future direction insight (they know where the role is heading)

Success profiles directly guide subsequent steps—they become the benchmark for assessing potential successors and designing development plans.

Step 3: Identify and nominate potential successors

A succession pool (or “bench”) is the group of potential candidates who could fill a critical role when it becomes vacant. Each key leadership position should have multiple potential successors where possible—relying on a single candidate creates its own vulnerability.

Where to find potential candidates:

• Annual talent review meetings where managers discuss their teams
• Performance and potential data from your talent management system
• 9-box grid assessments combining performance ratings with potential assessments
• Manager recommendations based on direct observation
• Cross-functional exposure through project teams or rotational assignments

Criteria for long-listing candidates:

Before adding someone to a succession bench, consider:

• Consistent performance: Track record of meeting or exceeding expectations
• Potential: Capability to operate one or two levels above current role
• Learning agility: Ability to adapt, learn quickly, and apply lessons across contexts
• Cultural fit: Alignment with organizational values and ways of working
• Strategic alignment: Skills and interests that match where the organization is heading

Categorize candidates by readiness:

Readiness Level	What It Means	Typical Development Need
Ready Now	Could assume the role immediately with minimal transition	Maintain engagement; provide exposure to Board or external stakeholders
Ready in 1–2 Years	Core capabilities present; specific skill gaps to close	Targeted development in 2–3 areas; stretch assignments
Ready in 3–5 Years	Strong foundation; significant development required	Broader experiences; formal programs; mentoring relationships

Maintain a simple succession bench table for each critical role:

Candidate Name	Current Role	Readiness	Risk of Loss	Key Strengths	Key Gaps
Sarah Chen	VP Operations, West Region	Ready in 1–2 Years	Medium	Operational excellence, team leadership	P&L exposure, investor relations
Marcus Williams	Director, Strategic Planning	Ready in 3–5 Years	Low	Strategic thinking, analytical depth	People leadership at scale

Process transparency matters. While individual names may remain confidential, ensuring that the process is fair and consistent helps reduce favoritism concerns and supports diversity, equity, and inclusion objectives.

Step 4: Assess capabilities and gaps objectively

The goal of this step is to compare each nominated candidate against the success profile using structured, evidence-based methods. Informal impressions and gut feelings should be supplemented (or challenged) by objective data.

Tools and data sources for assessment:

• Annual performance reviews: Historical track record of results
• 360-degree feedback: Perspectives from managers, peers, and direct reports
• Behavioral interviews: Structured conversations exploring past experiences relevant to future role demands
• Assessment centers: Simulations that test candidates in scenarios they’d face in the target role
• Validated psychometric assessments: Personality, cognitive ability, or leadership assessments with research backing
• Leadership assessments: Specialized tools evaluating executive-level capabilities

Create a candidate profile summary for each successor:

This document should include:

• Current qualifications and experience
• Key strengths relative to the success profile
• Development needs and skill gaps
• Estimated time to readiness
• Risk of loss (and mitigation strategies)

Example candidate profile:

Candidate: James Rodriguez Current Role: Director of Sales, Northeast Region Target Role: VP of Sales, North America

Key Strengths: Exceptional client relationships; consistently exceeded revenue targets by 15–20%; strong team builder with 95% retention of key talent

Development Needs: Limited exposure to P&L management; needs to develop cross-functional influence skills; no experience managing managers

Estimated Readiness: 18–24 months with targeted development

Risk of Loss: High—actively recruited by competitors

Ensuring consistency and fairness:

Apply the same assessment framework across all candidates for a given role. This consistency:

• Reduces bias in decision-making
• Supports diversity and inclusion by ensuring equal evaluation standards
• Creates defensible decisions if questioned
• Enables meaningful comparison across candidates

Analytics can help identify patterns across your organization. Succession-risk reports showing bench strength by function, region, or demographic category can highlight where talent gaps are most acute.

Step 5: Create and execute individual development plans

Succession planning only creates value when it translates into focused development for real people. A list of potential successors without development action is simply a wishful thinking exercise.

What an Individual Development Plan (IDP) should include:

IDP Element	Description
Priority capabilities (3–5)	Specific skills or competencies to develop, drawn from gap analysis
Learning activities	Concrete actions to build each capability
Owners	Who’s responsible for each activity (candidate, manager, HR, mentor)
Timelines	Target completion dates for each activity
Success measures	How progress will be evaluated

Concrete development examples:

• Stretch projects: Leading a 12-month product launch, turnaround of an underperforming business unit, or integration of an acquired company
• Cross-functional rotations: Finance leader spending six months in operations; sales director taking on a marketing assignment
• Mentoring relationships: Pairing with senior leaders who’ve navigated similar career transitions
• Formal programs: Executive education, leadership development programs, industry-specific training programs
• Job shadowing: Observing the current incumbent during key meetings, decisions, and stakeholder interactions
• External exposure: Board observation, industry association involvement, or customer advisory board participation

Align IDPs with organizational rhythms:

• Coordinate IDP creation with performance management cycles so development goals integrate with annual objectives
• Include development costs (leadership training, coaching fees, travel for rotational assignments) in annual budget planning
• Schedule quarterly or semiannual progress reviews with clear decisions: continue current plan, accelerate, adjust approach, or re-route to different development path

Development investment should extend beyond the top one or two candidates per role. Building a broader high-potential pool prevents over-reliance on a few individuals and creates organizational resilience.

Career development opportunities are also a powerful retention tool. When high-potential employees see the organization investing in their professional development, engagement increases and turnover decreases.

Step 6: Measure, communicate, and refresh the plan

An effective succession planning process is tracked like any other strategic initiative—with clear metrics, regular reviews, and accountability for progress.

Concrete metrics to track:

Metric	What It Measures	Target Example
Time to fill critical roles	Speed of succession when vacancies occur	Reduce from 6 months to 3 months
Bench strength	Percentage of key positions with at least one “ready now” successor	80% of critical roles covered
Internal vs. external hire ratio	Proportion of critical role fills from internal talent	70% internal fills
High-potential retention	Retention rate of employees identified as succession candidates	90%+ annual retention
Diversity of successor pool	Representation in succession benches	Reflects or exceeds workforce diversity

Establish baseline and review rhythm:

• Set a baseline in year one for each metric
• Review progress at least twice per year (mid-year and year-end talent reviews align well)
• Connect succession reviews to broader strategic planning processes

Governance structure:

Clarity on ownership prevents succession planning from becoming an orphan process:

• Process owner: Typically the CHRO or VP of Talent Management
• Decision makers: CEO and senior management for top roles; business unit leaders for roles within their organizations
• Board involvement: Annual (or more frequent) review of CEO succession and senior leadership bench
• Trigger for updates: Changes in business strategy, organizational structure, or market conditions should prompt succession plan review

Communication considerations:

Audience	What to Share
Board of Directors	CEO succession plan; senior leadership bench strength; risk areas
Senior leaders	Overall process; their role as sponsors; bench strength in their areas
Managers	Process overview; how to nominate and develop talent; their accountability
Employees	Existence of development opportunities; career path possibilities; process fairness

Individual appointment decisions typically remain confidential until announcements are made, but process transparency builds trust.

Continuous improvement is essential. As market conditions evolve, technology changes, and organizational strategy shifts, success profiles, candidate pools, and development plans must be refreshed. The succession planning process is an ongoing process, not a document that sits in a drawer.

Integrating succession planning with broader talent and business strategy

Succession planning doesn’t exist in isolation—it connects with workforce planning, annual budgeting, performance management, and leadership development programs across your organization.

Synchronize timelines for maximum impact:

Activity	Optimal Timing	Connection to Succession Planning
Annual performance reviews	Q4 or Q1	Provides performance data for succession assessments
Talent reviews	Q1 (post-performance reviews)	Identifies potential internal candidates and updates readiness assessments
Succession planning review	Q1–Q2	Updates succession benches based on fresh talent review data
Budget planning	Q3–Q4	Incorporates development costs for succession candidates
Individual development plan updates	Q2	Aligns development activities with succession priorities

Clarify roles and responsibilities:

• HR/Talent Management: Process owners who design frameworks, facilitate reviews, maintain documentation, and track metrics
• Line leaders: Decision makers who own succession decisions for their organizations and sponsor development of succession candidates
• Senior management: Ensures succession planning connects to strategic plan and business continuity requirements
• Key stakeholders across the organization contribute input and support the process

Support DEI objectives:

Succession planning offers a powerful lever for advancing diversity, equity, and inclusion:

• Ensure diverse slates of potential candidates for critical roles
• Provide equal access to development opportunities and stretch assignments
• Monitor demographic representation in succession pools and address gaps
• Challenge assumptions about “fit” that may reflect bias rather than job requirements

Mini-scenarios for application:

Scenario 1: Founder exit in 5–7 years A founder-CEO plans to step back by 2030. The succession planning strategy should identify internal and external talent pathways, develop two to three internal potential leaders through increasingly significant responsibilities, and maintain external candidate relationships as backup. The transition plan should span three to four years with progressive handoffs of key responsibilities.

Scenario 2: International expansion by 2028 An organization plans to open operations in three new countries. Succession planning should identify which key management roles will be needed, determine whether to develop internal candidates with international experience or hire externally, and begin building a leadership pipeline with relevant language skills, cultural fluency, and market knowledge two to three years before launch.

Next steps to get started:

1. Identify your top 5–10 most critical roles using the vulnerability and criticality criteria
2. Build success profiles for those roles with input from incumbents and senior leaders
3. Conduct initial succession bench assessment for priority roles
4. Create development plans for top succession candidates
5. Establish baseline metrics and schedule the first formal review
6. Scale the process to additional roles over 12–24 months

Successful succession planning requires commitment from business leaders, not just HR. When the CEO and senior leaders actively sponsor the process—participating in talent reviews, mentoring high-potential employees, and holding themselves accountable for bench strength—the organization moves forward with confidence regardless of who occupies which chair.

The investment in building a leadership pipeline pays dividends in business continuity, reduced recruitment costs, enhanced employee engagement, and organizational resilience. Start with a manageable scope, build capability over time, and treat succession planning as the strategic imperative it truly is.