Succession planning is a process for identifying and developing internal people with the potential to fill key business leadership positions in the company. Succession planning increases the availability of experienced and capable employees that are prepared to assume these roles as they become available. Taken narrowly, “replacement planning” for key roles is the heart of succession planning. Effective succession or talent-pool management concerns itself with building a series of feeder groups up and down the entire leadership pipeline or progression (Charan, Drotter, Noel, 2001). In contrast, replacement planning is focused narrowly on identifying specific back-up candidates for given senior management positions. For the most part position-driven replacement planning (often referred to as the “truck scenario”) is a forecast, which research indicates does not have substantial impact on outcomes.
Fundamental to the succession-management process is an underlying philosophy that argues that top talent in the corporation must be managed for the greater good of the enterprise. Merck and other companies argue that a “talent mindset” must be part of the leadership culture for these practices to be effective.
Research indicates many succession-planning initiatives fall short of their intent (Corporate Leadership Council, 1998). “Bench strength,” as it is commonly called, remains a stubborn problem in many if not most companies. Studies indicate that companies that report the greatest gains from succession planning feature high ownership by the CEO and high degrees of engagement among the larger leadership team 
Companies that are well known for their succession planning and executive talent development practices include: GE, Honeywell, IBM, Marriott, Microsoft, Pepsi and Procter & Gamble.
Research indicates that clear objectives are critical to establishing effective succession planning. These objectives tend to be core to many or most companies that have well-established practices:
Identify those with the potential to assume greater responsibility in the organization
Provide critical development experiences to those that can move into key roles
Engage the leadership in supporting the development of high-potential leaders
Build a data base that can be used to make better staffing decisions for key jobs
– In other companies these additional objectives may be embedded in the succession process:
– Improve employee commitment and retention
– Meet the career development expectations of existing employees
– Counter the increasing difficulty and costs of recruiting employees externally