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The shock departure of Instagram founders, Kevin Systrom and Mike Krieger, highlights the need for effective succession planning in business.

effective succession planningInstagram employees are reportedly already sceptical whether suitable replacements can be found to fill Systrom’s and Krieger’s shoes showing a a lack of effective succession planning in the business. It is critical that Instagram and Facebook act quickly because even the most successful businesses can be left exposed in circumstances where new leadership is not promptly identified and ready to take the reins.

Not only do investors lose faith and stock values plummet, employees become unsettled by the uncertainty and further departures often ensue. A business may also be at risk from a departing executive where it has not adequately protected itself from anti-competitive behaviour with enforceable restrictive covenants.

Succession plan throughout the business lifecycle

Succession planning is not just about plugging the gap when leaders depart, but also protects the business when a key individual is incapacitated or dies while in post. If somebody internal is promoted to fill the initial vacancy, their original role will also need to be filled, and therefore a pipeline of available talent is required at all levels within the organisation. Succession planning is also relevant to an expanding business when new roles are being created, which often require different skills and expertise to those required for existing roles. Succession planning should, therefore, be considered at every stage of the employee lifecycle: from initial recruitment, the on-boarding process, training and career development, performance management, workforce planning, to exit. Even at the outset of the employment relationship, care should be taken in drafting restrictive covenants that will adequately protect the business on an individual’s departure, and such covenants should be re-visited as the employee’s role changes and develops, to ensure that they remain enforceable.

A comprehensive business plan is invaluable

The key to successful succession planning is to align decisions to a carefully devised business plan that identifies what challenges and opportunities the business is likely to face in the future, and what competencies, skills and expertise will be required to meet these challenges and capitalise on the opportunities. Employers can then ascertain what roles will be required going forward and the competencies, skills and expertise of the individuals required to undertake these roles and, in so doing, will be able to identify potential leaders of tomorrow within their existing workforce.

Retain and develop your future leaders

Once a pool of future talent is identified internally or, if proves necessary, recruited externally, care should be taken in developing these individuals to prepare them for the challenges ahead.  Here, effective supervision and a strong mentoring scheme are essential. Managers should push the talent pool to expand their skills and experience by, for example, encouraging individuals to take on more senior roles on an “acting” basis to cover temporary absences. Secondments to other parts of the business, or possibly externally to third parties, can also be an effective means of increasing an individual’s exposure and breadth of experience.

Successfully manage out those who no longer fit

While effective succession planning focusses primarily on identifying and developing talent, it also requires a business to manage out those individuals for whom there is no future in the organisation as it moves forward. Consider if there is a genuine redundancy situation in respect of the individual’s role (perhaps the requirements of the role changed as the business has grown and developed?) or is it simply the case that the individual is no longer the right fit for the evolving business?

Effective succession planning is a dynamic process

Critically, a business should continuously evaluate its talent pool against its changing needs, and adapt succession plans accordingly. An outdated succession plan is almost as damaging to a business as a failure to succession plan.


By Sarah Taylor, senior associate, Stevens & Bolton LLP