Only 20% of companies have a strong leadership bench, according to DDI’s Global Leadership Forecast 2025. Leadership succession planning allows organizations to build a stronger leadership pipeline by identifying future leaders, developing their capabilities, and preparing them for critical roles.
What Is Leadership Succession Planning?
Leadership succession planning is the process of identifying, developing, and preparing individuals to take on future leadership roles (e.g., senior managers, directors, VPs). It helps organizations build a pipeline of capable leaders who are ready to step into critical roles when needed.
Unlike general succession planning, which focuses on position-based readiness throughout the organization, leadership succession planning centers on developing leaders. And to distinguish further, CEO succession planning focuses specifically on preparing for CEO transitions.
Leadership Succession Planning vs. Succession Planning: What’s the Difference?
Succession planning helps to identify critical roles and prepare internal talent to fill those positions with minimal disruption when transitions occur.
Leadership succession planning builds on that foundation by focusing specifically on identifying, developing, and preparing people for future leadership roles.
| Leadership Succession Planning | Succession Planning |
| Focus: Develop leadership capability | Focus: Ensure critical roles have qualified successors |
| Scope: Leadership roles across departments and levels (e.g., senior managers, directors, VPs) | Scope: Critical roles (including non-leadership positions) |
| Primary Output: Leaders who are equipped for expanded or changing responsibilities | Primary Output: Qualified successors who are prepared to step into specific roles |
Why Leadership Succession Matters
Leadership transitions introduce risk when people move into roles without adequate preparation.
Center for Creative Leadership (CCL) research illustrates this: 26% of first-time managers felt unprepared to lead, while nearly 60% received no training when they transitioned into their first leadership role.
And the consequences can reach beyond the individual leader, with 20% of first-time managers rated as doing a poor job by subordinates.
These findings underscore why organizations need to identify and develop leaders before they step into critical roles. Learn more about the benefits of succession planning and its deeper organizational value.
Common Leadership Succession Planning Models
Organizations structure leadership succession planning in several ways, depending on how they identify potential leaders and connect development to organizational needs. The four models below cover common ways to organize leadership development and succession decisions.
| Model | How It Works | Best For |
| Pool-Based | Develops candidates in transferable leadership skills, without tying them to a specific role. | Organizations building broad leadership bench strength |
| Position-Specific Backup | Identifies successors for a specific leadership role and prepares them for its responsibilities. | Critical leadership roles (where continuity matters) |
| High-Potential / 9-Box | Assess performance and potential to pinpoint high-potential talent and guide their development. | Organizations using potential and performance data to guide decisions |
| Role-Based Development | Defines required capabilities and develops candidates around their specific gaps. | Organizations aligning leadership development with role requirements |
Key Elements of a Leadership Succession Plan
| Critical Component | What It Entails |
| Key Leadership Roles | Define the roles and capabilities most important to leadership continuity. |
| Assessment of Leadership Potential | Evaluate candidates using performance data, feedback, and leadership competencies. |
| Leadership Development Plans | Address capability gaps through coaching, mentoring, training, and stretch assignments. |
| Knowledge Transfer | Capture critical knowledge and create opportunities for leaders to share experience. |
| Succession Plan Documentation | Create a clear record of organizational priorities, stakeholder input, and succession decisions. |
| Regular Review and Updates | Reassess leadership needs, candidate readiness, and development progress as conditions change. |
How to Build a Leadership Succession Plan: 7 Steps
A leadership succession plan should be grounded in your organization’s strategic priorities and leadership requirements. From there, it can be translated into specific development and transition actions.
Step 1: Assess Future Leadership Needs
Review strategic goals, business priorities, and relevant industry trends to determine what leadership capabilities the organization will need. Consider how changes in technology, markets, or operating models will affect leadership requirements.
Use these findings to define the skills, experience, and capabilities needed from leaders as the organization evolves.
Step 2: Identify Critical Leadership Roles
Prioritize leadership roles based on their strategic importance and the potential impact of a vacancy. Factors to consider: decision-making authority, operational complexity, and the difficulty of replacing the role.
A leadership title alone does not determine whether a role belongs in the succession plan. Focus your resources where a leadership gap would create the greatest disruption.
Step 3: Assess Current Leaders and Identify High-Potential Talent
Evaluate your current leaders and potential successors using performance data, feedback, leadership assessments, and evidence of future potential. Separate strong current performance from the capabilities needed for greater leadership responsibilities.
Establish consistent selection criteria while considering fairness, diversity, and inclusion amongst high-potential talent.
Step 4: Build Individualized Development Plans
Design a development plan for each candidate based on the capabilities required for the roles they may assume, and the gaps they need to address. Leverage mentoring, coaching, training, and stretch assignments to build those capabilities.
Current leaders play an important role by mentoring successors, sharing their institutional knowledge, and offering context that formal training cannot replicate.
Step 5: Create Real Leadership Experience Opportunities
Give candidates the opportunity to practice leadership before they are needed in a new role. Cross-functional assignments, project leadership, team leadership, and other responsibilities can build decision-making and people-management experience.
While leadership programs and conferences can supplement hands-on experience, these should connect directly to the situations candidates may face in leadership roles.
Step 6: Decide Where Internal Development Isn’t Enough
Cross-reference the capabilities required for leadership roles with the capabilities that are available internally. If a significant gap cannot be addressed through internal development within a reasonable timeframe, consider an external candidate.
The decision should be based on your organization’s leadership needs, rather than assuming that internal or external succession is inherently better. Later in this article, we will take a closer look at internal vs. external succession.
Step 7: Review and Update the Plan on a Regular Basis
Review your leadership succession plans annually (at least). During the review, reassess role requirements, candidate readiness, and development progress.
Conduct additional reviews after a major reorganization, strategy shift, leadership change, or any other significant business event. Regular updates allow the plan to evolve alongside the organization and its leadership needs.
How Organizational Structure Shapes Leadership Readiness
Many organizations begin by looking for people to fill leadership roles, putting the person before the position.
However, anchoring succession decisions in the structure of the role itself, its scope, reporting relationships, and what the work actually requires, provides context for assessing how candidates are performing today, what the next role demands, and where development can build readiness.
For a deeper look into how organizational structure shapes leadership effectiveness, see our guide about the characteristics of a good leader.
Span of Control and Development Capacity
A candidate’s development depends on the structure around their current role. For example: When their manager has a wide span of control, limited time for coaching and mentoring can make it harder to develop potential successors deliberately.
More manageable spans can create greater capacity for feedback, mentoring, and stretch opportunities.
Looking at reporting relationships helps organizations understand whether their organizational structure supports the development needed for leadership readiness.
Role Clarity and Successor Visibility
Clear roles and responsibilities give organizations a stronger basis for evaluating leadership readiness. When responsibilities overlap or remain ambiguous, it can be difficult to see what a candidate is actually accountable for, or how their current responsibilities compare with those of the role they may step into.
Ambiguous roles can also cause high-potential employees to be overlooked. Unclear responsibilities make it harder to recognize when someone is consistently exceeding expectations in their current role (which is a strong indicator of readiness for greater responsibility).
Strong role clarity makes readiness, performance, and development needs more visible.
Internal vs. External Leadership Succession
Internal succession is a strong option when qualified talent is already developing within the organization. In an interview with McKinsey, Vik Malhotra notes that 80% of successful CEOs came from within their companies.
That said, the right choice depends on the organization’s specific needs and the strength of its internal pipeline, which is why the comparison below outlines when each path makes sense.
| Internal Leadership Succession | External Leadership Succession | |
| Advantages | Faster transition with existing knowledge of the organization; reinforces internal career paths, supports continuity | Brings fresh perspectives and new ideas; adds capabilities that may not exist internally; can accelerate needed change |
| Disadvantages | May reinforce existing practices or limit new perspectives; internal candidates may lack needed capabilities | Takes more time and resources to recruit and onboard; greater risk of cultural mismatch; less familiarity with the organization |
Overcoming Common Challenges in Leadership Succession Planning
| Challenge | Solution |
| Internal Resistance to Change | Communicate the purpose and benefits of succession planning, involve key employees, and address concerns early. |
| Leadership Skill Gaps | Use targeted development, mentoring, coaching, and stretch assignments to build needed capabilities. |
| Lack of Transparency | Set clear criteria, involve relevant stakeholders, and communicate how succession decisions are made. |
| Limited Time and Resources | Make succession planning an ongoing priority and begin development well before a transition is needed. |
| Succession Planning Fatigue | Focus on the roles and development priorities that matter most, rather than trying to plan for every possible scenario. |
Visualize Your Leadership Pipeline with OrgChart
The steps above are more effective when succession decisions are viewed alongside the organization’s actual design. Visualizing candidates in relation to their teams, reporting lines, and responsibilities adds context that a standalone succession list cannot provide.
With OrgChart, you can see your leadership pipeline in the context of the organizational structure. OrgChart connects people and positions to the reporting structure, giving HR and business leaders a clearer view of how leadership changes could affect the organization.
That same visibility can help you plan your leadership pipeline alongside reorganizations, growth, and changing workforce needs.
See Your Leadership Pipeline on Your Org Chart
OrgChart helps HR and operations teams map critical leadership roles against your live reporting structure, so you can see who's ready to grow into the next level, and where the gaps are, at a glance.
FAQ
Leadership succession planning is the process of identifying, developing, and preparing employees to step into leadership roles when needed. It focuses on building readiness for roles such as senior managers, directors, and VPs while maintaining leadership continuity.
The process includes identifying critical roles, assessing talent, developing high-potential candidates, sharing leadership experience, and reviewing candidate readiness.
As noted in the table above, leadership succession planning focuses specifically on preparing people for leadership roles. General succession planning addresses any critical position that may or may not have leadership responsibilities.
Both involve identifying roles, assessing internal talent, and developing qualified successors. The real distinction is scope: leadership succession planning centers on leadership readiness; succession planning can apply to any position considered “essential” to business continuity.
The main steps are to assess future leadership needs, identify critical leadership roles, assess current leaders and high-potential talent, build individualized development plans, offer real leadership experience opportunities, determine where internal development is not enough, and review and update the plan regularly.
These steps allow organizations to connect leadership needs with talent development and make more informed decisions about internal and external succession.
Organizational structure affects leadership succession planning by shaping how much development support candidates receive and how easily their readiness can be evaluated.
A manager’s span of control can affect their capacity to coach and mentor potential successors, while clear roles and responsibilities make it easier to recognize employees who are exceeding expectations.
Poorly defined roles or overloaded reporting structures can make candidate potential and development needs harder to see.
Leadership succession planning covers a broader range of leadership roles (e.g., senior managers, directors, VPs).
CEO succession planning focuses specifically on preparing for a CEO transition. It is typically led by the board as part of its governing responsibilities. Therefore, the process, stakeholders, and decision-making requirements are different.
For more detail on the CEO-specific process, see our CEO succession planning guide.