Employee Development

Succession Planning Can’t Wait: Find and Develop Your HIPOs

Succession planning with high potential employees

There are a lot of great reasons to prioritize employee development in your organization, but one of the most needed (and most overlooked) reasons is planning for future leadership needs.

Some experts say we’re currently in a “leadership crisis” with large disparities between the experience of senior-level executives and the readiness of those who will replace them.

Shouldn’t that be expected, though? If training and development opportunities are lacking for new leaders, or if training methods don’t meet the needs of these modern learners, why would we expect them to be fully ramped up for leadership roles?

This is why succession planning now, not sometime down the road, is important to keep your organization operating smoothly and growing steadily.

Is Your Organization Reactive or Ready?

In an XpertHR survey of 505 chief human resource officers, chief financial officers, general counsels, business owners, consultants and assistants, 58 percent said they don’t have a succession plan because they make replacements when the need arises.

That’s quite risky to believe you’ll have someone able to step into a leadership position when you haven’t actively prepared them for it.

“The cost of an unplanned CEO departure can be as much as 100x that leader’s salary – 10x salary is a fair estimate for the cost of senior leadership turnover in general.”


When replacements are costly, you want to ensure that your new leaders are going to be successful. Studies show that internal leadership promotions have a success rate of 70-80 percent, whereas external hires for leadership roles only have a 50-55 percent success rate.

Succession planning may seem like a big undertaking, but leaving it up to chance is not a viable option to keep your organization healthy and successful.

3 Basic Succession Planning Steps

To prepare your organization for the future by building a succession plan and developing your potential leaders, there are three overarching steps to follow.

  1. Identify your organization’s current and future needs
  2. Assess your employees’ current skills and potential
  3. Connect the right employee with the right career path

Let’s look a little further into each of these steps.

1. Identify your organization’s current and future needs

When you plan for succession, you aren’t just looking for replacements for current leaders. You should be looking at both the current and future needs of the organization. What skills, competencies, and knowledge will you need your next generation of leaders to master? These may look much different five years from now than they do today.

Will the acquisition of new skills be important? Do you need future leaders to be continuous learners? Have you explored learning agility as a competency and how it applies to your organization?

To identify these needs, work with senior leadership to define overarching goals, potential pressure points, and perform a cost/benefit analysis of structural changes. To help establish benchmarks for your future needs you should rely upon your strategic vision for the company. Make sure your definition of future needs remains rooted in current realities of market conditions, competitive landscape, and organizational capabilities.

2. Assess your employees’ current skills and potential

Potential leaders need both the tactical skills they use in their current roles and a demonstrated ability to think strategically. This is where we can identify our high potential employees, or “HIPOs.”

There are many assessments you can use to get a clearer picture of which employees may be most ready for leadership development, based on both performance and potential. Your HIPOs are those who are high in both of these areas – these are the people you should look to first to include in your succession plan. 

However, those who show high potential but low performance should not be written off for leadership development. For these employees, delve into why their performance is low if they clearly have potential to be high performers. It may be that they’re poorly managed or don’t have the proper tools to do their job effectively. They may simply need some coaching and training to boost their motivation.

Once you’ve identified someone as a HIPO and want to include them in succession planning, talk to them about it. Don’t assume they want a leadership role. Ask them what their career path looks like to them, and what kind of role and responsibilities they’d like to have in the future.

You may identify someone who is uninterested in assuming a leadership role, and that’s okay. You can give them the opportunity to try a HIPO development program, but don’t make people feel like they’re committing to a leadership role by participating.

3. Connect the right employee with the right career path

If you want to keep every employee in your organization engaged with their work, then you need to provide a clear picture of how they can grow in their current position.

Your best employees want to improve their skills and move forward with their career, both in salary and responsibility. If these opportunities aren’t available at your organization, then they will look elsewhere.

Communicating with employees about available growth opportunities helps them to prepare themselves in both mindset and skill set well before they actually step into a position, and it keeps them engaged in their role.

When you’re open and honest about progress and possibilities, you help your employees feel valued and know that they have a future with your organization, whether their career path leads through management positions or to the heights of their chosen field.

To ensure your organization has strong leaders and managers ready to fill key positions, download our free ebook on how to create a succession plan. 

Training & Development Industry Researcher | Krista researches, analyzes, and writes about the impacts of employee learning on organizations and individuals. She looks at the industry shifts and trends that matter to L&D and HR professionals, and helps them understand how to create better training programs that grow their employees and their business.