How to Do Succession Planning and Run a Fair Talent Review

What are the steps in succession planning?

Whatever the size of your organisation, the work follows the same order. Roles come before people, tomorrow's cover comes before next year's successors, and evidence comes before any label. These are the steps we teach at Bodhih Training, and they work for a 60-person firm and a 2,000-person group alike.

• 1. Get a mandate: a sponsor (usually the chief executive), a date to report to the board and time from leaders.
• 2. Score your readiness on a short set of practices from 0 (not in place) to 4 (embedded), with the executive team.
• 3. Identify critical roles by scoring strategic impact, impact of a vacancy, scarcity of skills and time to fill.
• 4. Add a fact-based vacancy likelihood to find key-person risk, and name emergency cover for every critical role.
• 5. Ask managers for talent profiles: performance from your review cycle, potential on four indicators with examples, and aspirations in the person's own words.
• 6. Calibrate placements in facilitated meetings with a bias observer, and record every change with its reason.
• 7. Run a fairness check on the agreed placements before anyone uses them.
• 8. Build slates with readiness levels (ready now, 1-2 years, 3-5 years, external option) and read bench strength.
• 9. Agree development plans with successors, built mostly from stretch work, and hold stay conversations with people you cannot afford to lose.
• 10. Take a bench summary, the CEO plan and the board skills matrix to the board, then repeat the cycle every year.

How do you identify critical roles and key-person risk?

Ask what breaks if a role is empty on Monday, not how senior it is. Score each role from 1 to 5 on four factors, agree weights before you start, and combine them into a criticality score. Then add a fifth score, vacancy likelihood, based only on facts people have shared openly: an announced retirement, a stated move, a vacancy that exists now, strong market demand, someone new in post. Multiply criticality by likelihood to get a key-person risk score out of 25.

Here is a worked example for a Director of IT and ERP in a 900-person distributor, the only person who understands the system's customisations. The weights are the ones used in our kit's sample case.

What is the difference between performance and potential?

Performance is how well someone does the job they have now. Potential is evidence that they could succeed in a broader or more complex role within about two to three years. The two are related but different: a brilliant specialist may not want to manage anyone, and a steady team lead may have exactly what a site director needs.

Take performance from your appraisal or performance review cycle rather than re-rating it in the talent review. Break potential into four things you can give examples of: learning agility, drive and aspiration, judgement in new situations, and leading through others. Score each from 1 to 4, and apply one rule that makes a large difference in practice: no example, no score above 2.

How does the nine-box grid work, and how do you keep it fair?

The nine-box grid puts performance on one axis and potential on the other, so each person lands in one of nine boxes. It is usually traced to the business portfolio matrix that General Electric and McKinsey used in the 1970s. Use it to start development conversations, never as a public label. The box for strong performers whose potential sits within their current scope often holds your deepest experts, the people you can least afford to lose.

Potential ratings deserve the most checking. In a study of nearly 30,000 workers at a large North American retail chain, reported by Yale School of Management, Alan Benson, Danielle Li and Kelly Shue found that women were 7.3% more likely than men to receive a high performance rating yet received potential ratings 5.8% lower, and estimated that lower potential ratings explained up to half of the gender promotion gap. The practical response is a simple fairness check: for each self-identification group, compare the share of strong performers placed high potential, before and after calibration, and report only groups large enough to be meaningful.

How do you run a calibration meeting?

Calibration puts the same evidence in front of several leaders so that one standard applies across teams. Keep groups to six to ten managers and 15 to 30 people discussed, in two to three hours. Appoint a bias observer with nobody of their own in the room. Read the ground rules aloud: evidence, not personalities; an example for any high placement; anyone may ask for evidence; nothing about age, health, pregnancy or family plans.

Discuss the highest placements first, about four minutes per person. Record every change and its reason the same day. Common reasons in practice are new evidence, visibility bias (judging drive by hours seen), proximity bias (rating people at head office higher), recency, halo, similar-to-me and rating inflation to keep someone. If almost nothing changes, the meeting may be a rubber stamp; if half the placements move, the pre-work was probably weak.

How do you build succession slates and measure bench strength?

A slate names the people who could fill one critical role, each with a readiness level: ready now (could step in within about three months), ready in one to two years (needs one or two named experiences), ready in three to five years (needs broader growth), or an external option. Aim for two or more internal names for each top-tier role.

Bench strength is the share of critical roles with a ready-now successor, read role by role and by function. A simple traffic light helps the board: green when a role has a ready-now successor and named emergency cover, amber when it has one of the two, red when it has neither. Widen slates deliberately across sites, functions and working patterns, and check any rule that favours one candidate over another at the point of selection with counsel, because what is lawful differs by country.

Why do you need emergency cover as well as a succession plan?

A succession plan answers who will hold a role in two years. Emergency cover answers who signs, decides and fixes things on Monday if the role holder is suddenly away. A good cover plan names a person who knows they are the cover, writes down the first 30 days, sorts out system access and delegated authority (never passwords in the plan itself), tells key contacts and is tested at least once a year in a short walk-through.

In the sample case in our kit, a distributor moved from 5 to 21 of its 22 critical roles with named emergency cover in twelve weeks, and from 3 to 10 roles with a ready-now successor. The cover was the faster, cheaper win, and it protected the business while the longer work of development went on.

What does the board need for CEO succession?

The board owns CEO succession. The US Securities and Exchange Commission's staff described board succession planning as a key board function and CEO succession as a significant governance issue in Staff Legal Bulletin 14E (2009), and governance codes in other markets set similar expectations; the UK Corporate Governance Code 2024, which applies from 1 January 2025, expects succession plans for the board and senior management. In the EU, Directive (EU) 2022/2381 set gender balance objectives for listed company boards by 30 June 2026.

In practice the board needs three things: a CEO success profile written from strategy rather than from the current chief executive, a long-term timeline that starts two to three years before a planned transition, and an emergency protocol naming who acts as CEO, with what authority and for how long. A board skills matrix, scoring each director against the skills the strategy needs, turns director succession into a brief for the next search.

What should you tell employees about succession plans?

Decide your communication policy before the results exist, because this is where most programmes lose trust. Secrecy breeds rumours about a list; full disclosure of box labels turns a development tool into a permanent verdict. A middle path works in most organisations: tell everyone that the programme exists and how it works, tell people when they join a talent pool and agree their development with them, and tell successors they are on a slate, framed plainly as a development commitment and not a promise of the job.

When someone asks whether they are a high potential, talk about what you see instead of a label: two strengths with examples, and the one or two gaps that would open up broader roles. Then turn it into a plan. Write every talent note as if the person will read it, because in many countries they can ask to see the personal information you hold about them. Check language rules too: in Quebec, for example, written communications to staff and offers of promotion or transfer must generally be in French.

Common mistakes in succession planning

• Listing only the top team as critical, and missing the specialist who holds the only copy of vital knowledge.
• Confusing a slate with emergency cover, so the plan names a successor for 2028 and nobody for tomorrow.
• Re-rating performance in the talent review instead of taking it from the review cycle.
• Scoring potential with adjectives, or from airtime, hours seen, schedule or location.
• Placing someone higher to keep them, instead of recording a separate retention action.
• Telling people their box, or promising a successor the job.
• Asking people about retirement plans unprompted, or scoring vacancy likelihood from age.
• Using software to rate potential or rank successors. In the EU, AI used to evaluate workers or decide promotions is high-risk under the AI Act from 2 December 2027, according to the European Commission.
• Keeping no record of why decisions were made.