Various organizations, ranging from partners to competitors, are interconnected, and the business world is inherently dynamic. Due to these reasons, organizations encounter a significant challenge in ensuring a seamless leadership transition. This transition is not an easy task as the individual assuming the vacant leadership position must possess sufficient skills, knowledge, and experience.
To facilitate a seamless transition of leadership when a position becomes vacant, organizations implement succession planning. Succession planning is a strategic process which involves identifying and developing potential leaders and it plays a crucial role in maintaining organizational stability and continuity. However, organizations often face the challenge of deciding between internal and external succession.
In this blog, we will explore the concepts of internal and external succession and discuss which method is more advantageous for organizations.
Internal Succession:
In this succession strategy to fill vacant leadership positions, organizations promote existing employees from within the organization. In this approach, organizations identify and nurture high-potential individuals who possess the appropriate skills, knowledge, and experience to take on leadership roles when needed.
Internal succession offers multiple benefits, such as maintaining organizational culture, providing opportunities for current employees to grow their skills and knowledge, and motivating employees.
There are many techniques that can help organizations in internal succession, and one such technique is the 70-20-10 rule, which helps companies create future leaders from high-potential employees.
External Succession:
In contrast to internal succession, external succession involves organizations hiring leaders from outside the organization to fill important positions. This approach has its own benefits, such as bringing new skill sets, experience, and perspectives that contribute to organizational growth. Moreover, external succession can inject the organization with new energy, and enthusiasm, and establish new connections and networks.
Which is better for an organization, internal succession or external succession?
Determining which succession strategy is better is not a simple task, as the answer depends on several factors.
1. Talent availability: Every organization is different and possesses a unique pool of talent. Organizations that have a high-potential talent pool with the appropriate skill sets, knowledge, and experience can opt for internal succession. Conversely, organizations that do not have a high potential talent pool can adopt an external succession approach.
2. Benefits organizations want: So, both succession approaches have their own unique advantages as mentioned earlier. Based on the specific advantages an organization seeks, it can choose the approach accordingly.
3. Cost and Time: Internal succession is a less time-consuming and cost-effective approach since the employees are already familiar with other employees, management, the working environment, and organizational values. They do not have to spend time learning all of these aspects or adjusting themselves as they are already acquainted with everything about the organization.
On the other hand, in the external succession approach, the right candidates are selected through an extensive recruitment process, which can take anywhere from a couple of weeks to months. During this recruitment period, the leadership position may remain vacant, resulting in costs associated with the vacant post. Additionally, there are other costs involved, such as onboarding and relocation expenses.
Conclusion
The choice between internal and external succession depends on several factors and considerations. Both approaches offer unique advantages and trade-offs that organizations must carefully evaluate.
Internal succession allows organizations to leverage their existing talent pool, fostering continuity, preserving organizational culture, and promoting employee growth. It is a cost-effective and time-efficient solution as internal candidates are already familiar with the organization’s dynamics. Internal succession can enhance employee motivation and provide opportunities for advancement within the organization.
External succession brings fresh perspectives, diverse skill sets, and external networks to the organization. It can inject new energy, innovation, and expertise, contributing to organizational growth and adaptability. However, external succession may involve longer recruitment processes and incur additional costs, such as onboarding and relocation expenses.
The best succession strategy varies for each organization based on talent availability, desired benefits, and cost and time considerations. Organizations with a high-potential talent pool may benefit from internal succession, while those lacking such resources may find external succession more suitable. It is crucial for organizations to align their succession strategy with their specific goals and requirements.
