[1][2] Succession planning in dictatorships, monarchies, politics, and international relations is used to ensure continuity and prevention of power struggle.
[3] In business, succession planning entails developing internal people with managing or leadership potential to fill key hierarchical positions in the company.
[5] Effective succession or talent-pool management concerns itself with building a series of feeder groups up and down the entire leadership pipeline or progression.
[6] In contrast, replacement planning is focused narrowly on identifying specific back-up candidates for given senior management positions.
Fundamental to the succession-management process is an underlying philosophy that argues that top talent in the corporation must be managed for the greater good of the enterprise.
[8] Organizations use succession planning as a process to ensure that employees are recruited and developed to fill each key role within the company.
Through one's succession-planning process, one recruits superior employees,[citation needed] develops their knowledge, skills, and abilities, and prepares them for advancement or promotion into ever more-challenging roles.
[12] Companies well known for their succession planning and executive-talent development practices include: General Electric, Honeywell, IBM, Marriott, Microsoft, Pepsi and Procter & Gamble.
the emphasis has shifted from planning job assignments to development, with much greater focus on managing key experiences that are critical to growing global-business leaders.
PepsiCo, IBM and Nike provide current examples of the so-called "game-planning" approach to succession and talent management.
In these and other companies annual reviews are supplemented with an ongoing series of discussions among senior leaders about who is ready to assume larger roles.
There is no widely accepted formula for evaluating the future potential of leaders, but many tools and approaches continue to be used today, ranging from personality and cognitive testing to team-based interviewing and simulations and other Assessment centre methods.
Jaques developed a persuasive case for measuring candidates' ability to manage complexity, formulating a robust operational definition of business intelligence.
[13] The Cognitive Process Profile (CPP) psychometric is an example of a tool used in succession planning to measure candidates' ability to manage complexity according to Jaques' definition.
[citation needed] With organisations facing increasing complexity and uncertainty in their operating environments some[quantify] suggest a move away from competence-based approaches.
[15] In a future that is increasingly hard to predict leaders will need to see opportunity in volatility, spot patterns in complexity, find creative solutions to problems, keep in mind long-term strategic goals for the organisation and wider society, and hold onto uncertainty until the optimum time to make a decision.
What used to be a rigid, confidential process of hand-picking executives to be company successors is now becoming a more fluid, transparent practice that identifies high-potential leaders and incorporates development programs preparing them for top positions.
Mahler was responsible in the 1970s for helping to shape the General Electric succession process which became the gold standard of corporate practice.
Resourcing of the work varies widely - from numbers of highly dedicated internal consultants to limited professional support embedded in the roles of human-resources generalists.
Business Exit Planning is a body of knowledge which began developing in the United States towards the end of the 20th century[citation needed], and is now spreading globally.
Objectives may include maximizing (or setting a goal for) proceeds, minimizing risk, closing a Transaction quickly, or selecting an investor that will ensure that the business prospers.