By Nancy M. Martone, M.S., Healthcare Practice Leader, The Human Resource Consortium
Succession Planning: The Business Case
Succession planning has become essential in today’s volatile economy, shaped by evolving regulations, rapid technological advancements, and mounting financial and political challenges. As these pressures grow, increasingly leaders are considering new opportunities or choosing to leave their professions altogether. These departures are sometimes planned but others can be sudden and unexpected. DDI’s (Development Dimension International) Global Leadership Forecast 2025 highlights that forty percent (40%) of overstressed leaders have contemplated stepping away from leadership roles to prioritize their wellbeing, putting organizational leadership pipelines at risk.
Leading companies have addressed this challenge by investing in proactive succession planning to unlock their leadership potential. In such an environment, organizations take a proactive stance, identifying talented individuals early and nurturing them through comprehensive development programs. Succession planning then becomes not simply a fallback position, but a strategic necessity that fosters continuity, stability, and long-term growth. By investing in mentorship, promoting cross-functional experiences, and utilizing data-driven insights, organizations develop a resilient pool of leaders who are prepared to guide change and spur innovation. Effective succession planning also creates a culture of adaptability, empowering people to confidently step into new roles while safeguarding the organization’s future.
The Key to Unlocking Leadership Potential
A ‘key’ functions by aligning internal mechanisms to the right position, allowing movement and access. Succession planning works in much the same way for leadership development: it aligns internal organizational components to create opportunities for growth and leadership readiness. Which internal mechanisms must be activated and positioned to cultivate effective leadership and ensure alignment throughout the organization?
- Immediate and Future Key Roles – Identify which positions are necessary for both current and future organizational operations. Review roles across departments and levels. Assess and update the required competencies (knowledge, skills, and abilities aka KSAs) for these roles as needed.
- Assess Internal Talent, especially from ‘Feeder Roles’ – Evaluate potential successors for key roles and KSAs, considering their performance, growth potential, interest in advancement, and results from leadership assessments or programs.
- Create Developmental Plans – In collaboration with the identified successor and current manager, create a development plan that provides the necessary growth opportunities to ready the individual for succession. This may include, but is not limited to, stretch goals, career counseling, executive coaching and/or mentoring, and development projects.
- Continuous Monitoring, Reviewing and Tracking– Regularly track and review the organization’s Succession Plan, ideally every quarter. Also, assess each identified successor’s development plan quarterly to confirm progress, support, resources, and engagement.
There are barriers to succession planning that include resistance to change, lack of trust, reluctance to share knowledge, misunderstanding of the process, rigid internal structures, and biased selection. The right “key” can unlock leadership potential and overcome these challenges.
Succession Planning Case Study
A hospital CEO, anticipating the retirement of key leaders, began a succession planning process.
- The Human Resources leader provided training on the 9-box grid assessment tool, instructing each leader to evaluate their staff and subsequently meet to discuss results.
- Training sessions and communications were implemented to gain leadership buy-in for the succession planning process.
- Employees identified as immediate or near-term successors participated in external leadership assessments and established developmental goals based on those assessments and prior performance reviews.
- Since implementation, several successors have moved into senior director positions and are preparing for possible C-suite roles. One successor is positioned for an upcoming executive vacancy, while another opted to leave the plan for personal reasons.
Succession planning enabled internal promotions, increasing employee engagement and trust in the organization as identified in the annual employee engagement surveys. They transitioned seamlessly into their new roles.
These outcomes demonstrate the value of proactive succession planning, not only in mitigating potential leadership gaps but also in fostering a culture of development and opportunity within the organization. As successors transition into new roles, they bring continuity, institutional knowledge, and renewed energy that propel the hospital’s mission forward.
