With so many pressing business issues in the mix each day, developing tomorrow’s leaders might take a backseat in your mind. While it’s tempting to simply focus on the present, it’s critical to plan for success in the future as well. That’s where succession planning comes in.

Not sure where to start? Ask yourself these questions:

  • Do we have the leadership bench strength to achieve our projected growth?
  • What does it cost to fill a leadership vacancy with someone from the outside?
  • Do we risk compromising leadership qualities just to fill openings?
  • How has our business environment changed over the last few years?
  • How many of our current executives say they felt prepared for their first leadership role?

The current labor force in America is polarizing – there are lots of older workers (aging quickly), lots of younger ones, and fewer people in the middle. That’s a legitimate managerial challenge. With so many fast-paced changes occurring in today’s World of Work, companies are experiencing skill shortages and managers are discovering that they have no one ready to fill vacancies. And the representation of women and minorities at senior levels is still insufficient.

When a key position is left unfilled, important decisions cannot be reached and critical activities are delayed. It’s often difficult to meet or exceed customer expectations, to confront competition successfully, or to follow through on crucial long-term initiatives. Moreover, companies tend to see reduced loyalty among employees, increased turnover of identified successors and high performers, increased attrition in executive-level positions, and a shortfall in the number of future leaders. And no business wants that.

Retaining leadership talent is both a strategic and economic necessity. You cannot implement your strategy without the right leadership, so there is a heightened sense of urgency around succession planning. No matter how certain your future appears, now is the time to start taking measures to close the gaps. Creating a succession plan can help you drive competitive strategy, reinforce values, and successfully secure your company’s future.

Now let’s talk about the specific benefits of succession planning. There are many.

We’ll start with business results. Future viability and performance requires having the right people in the right place at the right time. This means that you must continually develop qualified pools of candidates who are ready to fill critical positions or step in if there are unplanned losses of key leaders. Filling leadership positions internally cuts down on hiring costs, ramp-up time, and lost productivity. On the flip side, costs and organizational risk continue to go up for external searches. Plus, even if you identify someone with the right credentials, you may find out down the line that the person does not fit the company culture.

Effective succession planning results in enhanced and targeted employee development, which leads to improved employee morale and engagement, increased workforce productivity, and expedited goal achievement. With so many leaders planning for retirement, proactive knowledge transfer is critical. If your organization can pinpoint the skills and competencies of retiring employees, you can use that information to develop qualified successors and facilitate smooth transitions when the time comes.

What does all this lead to? Significant return on investment and better business results.

Your people are helping your business succeed now; succession planning can help you ensure that your company continues to succeed in the future.