How to Build a Succession Plan: From Identifying Critical Positions to Tracking Candidates

A succession plan is an HR system that allows gaps arising in an organization's critical positions to be filled from pre-defined candidate pools. In practice it is often treated as a list-building exercise: position titles go in one column, candidate names in the next, and the file waits until the next management meeting. Yet a succession plan is not a document in itself; it is a process design made up of position analysis, readiness measurement, development planning and regular review. What determines the outcome is not whether the document exists, but whether these steps actually operate.

It is worth clarifying at the outset that succession planning and talent management programmes are not the same thing. Talent management is a broad field covering the identification and development of high-potential employees across the organization, and it may not include a target position definition at all. Succession planning focuses on specific positions and defines which role each candidate is being prepared for. The two structures feed each other; however, the output of a succession plan is position-based readiness, while the output of a talent programme is pool-level development progress. Where this distinction is not established, HR teams attempt to report two different processes in the same table, and the traceability of both declines.

For HR teams the real difficulty emerges less in preparing the plan than in running it. When the definition of a critical position is not clear, the scope expands beyond what is manageable; when candidate identification is based solely on current performance, readiness appears higher than it is; when the development plan is not designed around the individual, the candidate remains on the list but is not in fact being prepared. This article addresses succession planning through four implementation steps: defining the scope, building the candidate pool on an evidence base, running the development plan, and monitoring the system.

Defining Critical Positions and Setting the Scope

The first step in succession planning is determining which positions will be included. This decision is not made through a mechanical selection that starts at the top of the organization chart and works downwards. Criticality depends not on where a title sits in the hierarchy, but on the magnitude of the impact the organization would face if the position became vacant. A production planning specialist at middle level may be more critical than a deputy general manager if that role is the single decision point in the supply chain.

HR teams can use four criteria in assessing criticality. The first is business continuity impact: which processes stop and which decisions are suspended when the position is vacant. The second is replacement difficulty: how available this profile is in the external market and how long recruitment takes. The third is organization-specific knowledge density: how much of the knowledge the position carries has been built through internal experience, and how long it would take an external hire to acquire it. The fourth is relationship capital: the degree to which the position's relationships with customers, suppliers or public bodies can be transferred.

Assessment against these four criteria keeps the scope at a realistic level. A common deviation in practice is setting the scope too broadly. In an organization of one hundred and fifty people, declaring forty positions critical makes the system impossible to run; the burden of building candidate pools, measuring readiness and running development plans for every position exceeds the HR team's capacity. Keeping the scope within five to fifteen per cent of total headcount produces a workable level in most organizations. Where the scope is set too narrowly, the system covers only senior management and knowledge-intensive middle-level positions are left unprotected.

Who takes part in the criticality assessment also affects the result. A list prepared by the HR team alone reflects the actual operation of processes incompletely; left entirely to department heads, each manager tends to mark the positions in their own team as critical. A workable method is for HR to prepare an assessment form covering the four criteria, for department heads to complete it for their own areas, and for the results to be calibrated in a joint session with senior management. In the calibration session positions are reviewed one by one, the way different departments have interpreted the same criterion is compared, and the final list is produced against a shared standard.

Once the scope is set, a position profile is prepared for each critical position. This profile differs from a job description: a job description describes what the position does today, while a position profile defines the competency, experience and technical knowledge set required of whoever will hold it. The profile is prepared with the future state of the position in mind. For an operations directorate scheduled to be transformed by a digitalisation programme within three years, preparing candidates against today's task set produces an incomplete design.

Building the Candidate Pool on an Evidence Base

Once critical positions are defined, the candidate pool is built. The most common implementation error at this stage is identifying candidates solely by looking at performance scores in their current position. Performance shows a person's output in their present role; success in the role above is determined by a different competency set. That an employee performing strongly in a specialist role will produce the same result in a managerial role is an assumption unsupported by data. HR teams measuring these two concepts separately directly affects the accuracy of the succession plan.

The evidence sources available for candidate identification are varied, and not relying on a single source is essential. Performance appraisal results show the person's output and working discipline in the current role. Structured potential interviews provide information on the candidate's learning speed, capacity to work with ambiguity and tendency to take responsibility. Project-based observations reveal how the candidate behaves in conditions similar to the target position. Multi-source feedback applications make the candidate's team and stakeholder relationships visible from different angles. Using these sources together reduces the bias risk carried by assessments that rest on a single manager's observation. At this point, competency assessment applications constitute a strong evidence source in succession decisions, because they allow the candidate to demonstrate the behaviours the target position requires under standard conditions.

As the candidate pool is built, a readiness level is determined for each candidate. In practice a three-tier classification provides sufficient clarity: ready-now candidates are in a position to take over if the role became vacant today; candidates ready within one to two years could take over on completion of a defined development programme; long-term candidates carry potential but have not yet passed the basic experience threshold. Tying this classification to a written rationale matters. The phrase "not ready" carries no information on its own; when it is recorded which competency area and which experience gap makes the candidate unready, the development plan takes shape of its own accord.

Different interpretations of readiness levels among managers are a frequent source of inconsistency in succession plans. For one manager "ready now" describes a maturity sufficient to take over the position without difficulty; for another it describes a level at which the role could be carried with support. To close this gap, readiness tiers need to be written with behavioural definitions. For the "ready now" tier, for instance, a concrete criterion can be defined such as the candidate having actually exercised at least three of the target position's decisions within the past year. Once definitions are written down, assessments arriving from different departments rest on a comparable basis.

Where candidate pool records are held also affects the continuity of the system. Succession data kept in spreadsheets ages over time once the responsibility for updating rests with a single person. Records maintained through a module defined in the HR information system both allow a link to performance and development data and permit access rights to be defined in a controlled way. Whatever the record structure, the assessment date, the evidence sources used and the readiness rationale need to be held together for each candidate; a readiness level whose rationale is not recorded becomes a matter for renewed debate at the next review.

Identifying more than one candidate for each critical position increases the resilience of the system. Single-candidate succession renders the plan void if that candidate leaves the organization. The same candidate being shown as a successor for several positions is also a frequent occurrence; this indicates that the candidate pool is narrow and signals that the external recruitment option should be considered alongside internal sourcing.

Designing and Running the Development Plan

An individual development plan is prepared for candidates whose readiness level has been determined. It is essential that this plan is not a standard training calendar. Where candidates carry gaps in different competency areas, the development intervention should differ too. Classroom training works for a candidate with a financial literacy gap, while a candidate with difficulty in decision-making needs to take on real decision responsibility.

The implementation tools available in development plans are as follows:

•     Task enlargement: The candidate is given a task within their current role that falls within the target position's area of responsibility. Participation in budget preparation, conducting performance conversations for a sub-team, or taking on a supplier negotiation fall within this scope.

•     Project leadership: The candidate is given responsibility for a project in which they will work with people outside their own hierarchical team. This is a tool that develops the capacity to influence without authority and produces observable output.

•     Acting periods: The candidate actually deputises during the position holder's leave or extended assignment periods. This provides the most realistic environment for measuring readiness.

•     Structured mentoring: A manager who has previously held the target position is assigned to the candidate as a mentor. Meeting frequency and agenda topics are defined in advance.

•     Cross-functional assignment: The candidate is assigned to a different function for a defined period. Its preparation value is high for positions with cross-functional dependencies.

In running the development plan, HR's role is not limited to preparing it. The owner of the plan is the manager to whom the candidate reports; HR sets the process timetable, schedules interim reviews and monitors the completion rate. In practice, the point at which development plans most often stall is where daily operational load takes priority over development activity. An effective method of preventing this is to write development targets into the manager's own performance objectives; progress in the readiness level of their successors becomes one of the manager's assessment criteria.

The duration and intensity of development plans differ according to the candidate's readiness tier. For candidates expected to be ready within one to two years, the plan is designed with quarterly interim milestones and progress is assessed at the end of each period against concrete outputs. For long-term candidates the focus is less on the specific requirements of the target position than on broadening basic managerial experience. Applying a programme of the same intensity to every candidate leads both to waste of resources and to unmet expectations among candidates at an early stage.

The budget dimension of development activity is also part of planning. Defining the training, coaching and assignment resource allocated to succession candidates as a separate line within the annual training budget provides both ease of tracking and clarity of decision. Where the budget is absorbed into the general training pool, activities aimed at succession candidates can fall behind other requests arising during the period.

Whether the succession plan is disclosed to candidates is a decision HR teams frequently face. Full transparency clarifies the meaning of the development plan and strengthens candidate engagement; on the other hand, where it is uncertain when the position will become vacant, it carries the risk of creating expectation. A balanced approach in practice is to explain the rationale for the development investment and the targeted competency areas, rather than directly informing the candidate that they are on a successor list. This approach increases participation in development activity without producing a commitment regarding the position.

Success Plan: Monitoring the System and Measurement Indicators

A succession plan is not a system that operates by itself once established. Organizational structures change, candidates leave, and the competencies positions require evolve. The plan therefore needs to be reviewed at defined intervals. In practice a six-month review is an appropriate frequency for most organizations; in fast-growing organizations or those undergoing restructuring it can shorten to three months.

The review meeting is designed as a structured session run jointly by HR and the relevant level of senior management. The agenda is fixed: are there changes to the critical position list, have there been departures from or additions to the candidate pool, what is the completion status of development plans, are there candidates whose readiness level has been updated. The output of this session is an updated succession table and the development actions for the following period.

A matter HR teams need to attend to during review is reflecting changes in organizational structure into the plan. Merged departments, newly created roles or reporting line changes directly affect the critical position list. When a structural change decision is taken, updating the succession plan is often left to the end of the agenda, and the plan turns into a document naming successors for positions that no longer exist. To prevent this, reviewing the succession plan can be written into the standard steps of organizational change processes.

The indicators used to monitor the effectiveness of the system should be kept limited in number. Coverage rate, showing in how many critical positions at least one ready candidate exists, measures the core output of the system. Internal fill rate, showing how many vacated critical positions were filled with internal candidates, shows whether the plan is actually working. The proportion of candidates named as successors who remain with the organization reflects the effect of development investment on retention. The development plan completion rate reveals the execution discipline of the process. These four indicators are sufficient to form the backbone of a report to senior management.

There is a point to attend to in interpreting the indicators. A high internal fill rate is not on its own a positive result; where the organization overlooks its need to bring in competencies from outside, it can become inward-looking over time. In a healthy balance, a significant proportion of critical positions are filled internally while certain positions are deliberately kept open to external recruitment. Recording this choice together with its rationale keeps the decision in organizational memory.

As the maturity of the system increases, so does the range of uses for the monitoring data. Records held over several periods build up a body of evidence showing which development tool actually advances readiness levels. Comparing the proportion of candidates whose readiness tier rose after acting periods with the proportion showing the same progress after classroom training provides data for the following period's development choices. This comparison allows HR to base its recommendations on the development budget on records rather than impressions.

A succession plan produces results when it works together with the other structures within the scope of HR systems setup. A succession plan not connected to the competency model, performance management and training planning remains a separate file and becomes an additional burden for the HR team. Where the connection is established, the same competency set is used in the performance conversation, in the development plan and in the succession assessment; data is fed from a single source and the system becomes sustainable.

At Kaan Böke Management Consulting, we design every component of the succession system according to your organization's structure — from critical position analysis to evidence-based construction of the candidate pool and the monitoring of development plans. With 35+ years of corporate experience and a 25+ year C-level leadership perspective, we deliver strategic and actionable solutions. To assess your organization's succession planning needs together, you can get in touch with us.