Succession planning is a strategy for passing on leadership roles - often the ownership of a company - to an employee or group of employees. Also known as "replacement planning," it ensures that businesses continue to run smoothly after a company's most important people move on to new opportunities, retire, or pass away.
Succession planning evaluates each leader’s skills, identifying potential replacements both within and outside the company and, in the case of internal replacements, training those employees so that they’re prepared to take over. Succession planning is not a one-time event; succession plans should be reevaluated and potentially updated each year or as changes in the company dictate.
In addition, businesses might want to create both an emergency succession plan, in the event a key leader needs to be replaced unexpectedly, and a long-term succession plan, for anticipated changes in leadership.