The Hidden Productivity Killer: Why Succession Planning Matters at Every Level

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Written By Brian Nelson-Palmer

A resignation, promotion, illness, or two-week vacation should not bring important work to a halt.

The question is not whether someone will eventually leave, get promoted, or take time off.

It is this:

Can the work continue when they do?

For many teams, the honest answer is no.

My recent conversation with business growth strategist Meridith Elliott Powell changed how I think about this problem. She calls it talent interruption: the productivity and financial disruption that happens when a critical employee becomes unavailable and no one is prepared to step into the role.

Listen To, or Watch, This Conversation With Meridith

That conversation led me down a rabbit hole of research on how big of an issue this is, which I’ve framed for you here along with some of the knowledge Meridith shared during our discussion.

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Succession Planning Is Not Just for CEOs

Most companies prepare for executive turnover while ignoring the people who keep daily operations moving.

Deloitte research found that 86% of business leaders consider succession planning urgent or important, but only 14% believe their organizations execute it well.

SHRM has reported a similar gap. More than 70% of organizations lack a formal succession plan, even though 82% of leaders consider it essential.

The problem reaches far beyond the C-suite.

Talent interruption happens when:

  • A salesperson resigns with years of client knowledge.

  • A payroll specialist takes leave before payroll closes.

  • A manager gets promoted without preparing a replacement.

  • The only person who understands a difficult account becomes unavailable.

  • A leader takes vacation but continues answering emails because no one else can make decisions.

These disruptions create more than inconvenience.

They delay decisions, increase mistakes, frustrate customers, overload remaining employees, and can contribute to additional turnover.

Gallup has found that managers account for approximately 70% of the variance in team engagement. When a manager leaves without a prepared successor, the uncertainty can affect the entire team.

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The Real Cost Is Lost Knowledge

Replacing an employee does not immediately replace what they knew.

Employee turnover creates recruiting, hiring, onboarding, and training costs. SHRM has estimated that replacing an employee can cost the equivalent of six to nine months of that person’s salary, with higher costs for specialized and leadership roles.

But the deeper productivity loss is institutional knowledge.

Research on employee turnover shows that tacit knowledge is especially difficult to replace. This includes judgment, relationships, context, instincts, and lessons learned through experience.

It is the knowledge held by the employee who understands:

  • Which client needs a phone call instead of an email.

  • Which system warning requires immediate action.

  • Which stakeholder should be consulted first.

  • Which deadline has flexibility.

  • Why the documented process contains certain exceptions.

A checklist can preserve the steps. It rarely preserves the thinking.

That is why documentation alone is not enough.

Documentation records a process. Cross-training teaches someone to perform specific tasks. Succession planning prepares someone to manage the entire role, including its priorities, relationships, risks, and judgment calls.

Teaching someone which buttons to click is useful.

Teaching them how to decide what to do when the usual process fails is what makes the team resilient.

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The Risk Is Growing

A large amount of workplace experience is approaching retirement age.

The U.S. Census Bureau projected that by 2030, every member of the Baby Boomer generation will be at least 65.

That does not mean everyone will retire at once. It does mean organizations should expect more experienced professionals to leave the workforce over the coming years.

Much of their most valuable knowledge has never been formally documented.

These employees are not simply completing tasks. They are quietly preventing problems, maintaining relationships, spotting risks, and making judgment calls that no manual fully explains.

When they leave without transferring that knowledge, the organization often discovers the gap too late.

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Preparation Changes the Outcome

A strong succession plan answers two questions before a crisis: Who steps in, and what do they do?

During our conversation, Meridith pointed to JPMorgan Chase as an example of succession planning done well.

When CEO Jamie Dimon experienced a serious medical emergency, other executives were already prepared to assume responsibility. The company continued operating because leadership responsibilities had been discussed, communicated, and practiced before they were needed.

She contrasted that with a company led by four co-CEOs who believed they did not need a succession plan because they were relatively young, healthy, and had one another.

Within 48 hours, one executive died unexpectedly and another was discovered embezzling. According to her, the company then spent months in crisis and lost a significant share of its employees and customers.

The difference was not the disruption. It was the preparation.

One organization had already decided what would happen if a critical leader became unavailable.

The other assumed it would never happen.

Stop Rewarding Bottlenecks

The person who solves every problem alone may look invaluable while quietly making the team more vulnerable.

Organizations often reward individual performance without equally rewarding the development of others.

That incentive needs to change.

A strong performer should be recognized for producing results. A strong performer who also coaches, delegates, and prepares other people should be considered even more valuable.

As she explained:

“A talented person is valuable to an organization. A talented person who can develop other talented people is invaluable to a company.”

She compared this with the difference between recruiting Michael Jordan and recruiting his coach, Dean Smith.

Organizations usually chase the Michael Jordans: exceptional individual performers.

Resilient organizations also value the Dean Smiths: leaders who consistently develop talented people and build strong teams around them.

Developing a replacement should be evidence of leadership, not a threat to job security.

When leaders hoard knowledge, they can become trapped in their current positions. When they build capable successors, they demonstrate that they are ready for greater responsibility.

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Start With Three Critical Roles

You do not need a company-wide program to begin.

Start with three critical roles rather than creating an enormous succession plan that becomes too complicated to execute.

A critical role usually has:

  • High dependence on one person.

  • Little or no backup coverage.

  • A long recovery or replacement period.

  • Meaningful financial, operational, customer, or compliance consequences.

Ask one direct question:

If this person disappeared tomorrow, what would stop working?

Look beyond job titles.

The most critical employee may not be the person with the highest rank. It may be the employee everyone calls when something goes wrong, the specialist who protects an essential system, or the person who holds a major customer relationship together.

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Build a Leader Avatar

Before choosing a successor, define what success in the role requires.

Meridith calls this a leader avatar.

It works like an ideal-customer profile, but instead of describing the ideal buyer, it describes the qualities, capabilities, values, and behaviors required for a specific leadership role.

The avatar might include:

  • Technical knowledge.

  • Communication ability.

  • Decision-making skills.

  • Important internal and external relationships.

  • Financial understanding.

  • Curiosity and willingness to learn.

  • Strategic and systems thinking.

  • The ability to develop others.

Once the avatar is clear, managers can evaluate potential successors against the actual requirements of the role rather than relying on seniority, familiarity, or instinct.

Have the Gap Conversation

Potential is not the same as readiness.

Meet with potential successors and compare their current capabilities with the leader avatar.

Ask the employee to assess themselves. Then provide your own honest assessment.

Where are they already strong?

Where do they still need experience?

What assignments, training, or exposure would help close those gaps?

The goal is not to promise a promotion.

The goal is to create a specific development path and see whether the person takes responsibility for progressing along it.

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Teach People to Think

Succession planning is not just teaching someone how to complete a task.

Meridith shared the example of a former boss who answered many questions by asking, “What do you think we ought to do?”

It was frustrating at first. Over time, it taught the team to arrive with possible solutions instead of depending on the leader for every answer.

When that leader was eventually promoted, the team could continue without him because he had taught them how to think through problems.

Leaders weaken succession plans when they rescue employees from every challenge.

Solving the problem for someone may save time today.

Coaching them through it builds capability for tomorrow.

Practice Before the Crisis

A succession plan that has never been tested is only a theory.

Give potential successors real opportunities to operate at the next level while the current leader is still available to provide support.

Let them:

  • Lead an important meeting.

  • Present to senior leadership.

  • Make a meaningful decision.

  • Manage a stakeholder relationship.

  • Cover the role during a vacation.

  • Make a mistake and correct it.

The goal is not to create a perfect copy of the current leader.

It is to help the successor understand the role well enough to think independently, make sound decisions, and manage whatever happens.

As Meridith put it:

“Cross-training is teaching me to do skills. Succession planning is teaching me to holistically do the job.”

AI Makes Human Leadership More Important

Automation changes the skills successors need, but it does not eliminate the need for successors.

The workplace is shifting from what Meridith describes as knowledge mode to learning mode.

Future leaders cannot rely only on knowing how the business worked last year. They must remain curious, communicate well, think strategically, understand systems, and adapt as technology changes.

The World Economic Forum’s Future of Jobs Report 2025 found that 86% of employers expect AI and information-processing technologies to transform their businesses.

At the same time, leadership and social influence remain among the most important future skills.

AI can automate routine work and surface information.

Someone still needs to:

  • Recognize when the technology is wrong.

  • Take responsibility for decisions.

  • Manage exceptions.

  • Communicate with affected people.

  • Retrain employees.

  • Redesign the process when conditions change.

The best successor is not simply the person who knows today’s process. It is the person capable of learning when that process changes.

Your 30-Day Starting Plan

Build a basic succession system in one month.

Week 1: Identify three critical roles and document what would stop if each became vacant.

Week 2: Create a leader avatar for each role. Include the skills, relationships, decisions, and business knowledge the position requires.

Week 3: Identify one or more potential successors and have an honest gap conversation with each person.

Week 4: Test the plan. Let the potential successor lead a meeting, make a decision, manage a stakeholder, or cover the role for a day.

Then review what worked, what failed, and what knowledge remained trapped in one person’s head.

The Bottom Line

The real productivity test is not how much your team accomplishes while everyone is present.

It is whether the work continues through a vacation, promotion, resignation, illness, or unexpected disruption.

Start small.

Choose three critical roles. Define what success looks like. Develop backups who have practiced making real decisions, not just read the instructions.

Most importantly, reward leaders for developing other people.

When “Who is ready to take your job?” becomes part of the promotion conversation, knowledge sharing becomes a sign of leadership rather than a threat to job security.

Protecting productivity means protecting your team’s knowledge.

Start documenting. Start coaching. Start practicing. Build the bench before you need it.

To watch the full conversation that inspired this article, check out the Productivity Gladiator episode featuring business growth strategist Meridith Elliott Powell, or her book, Who Comes Next?: Leadership Succession Planning Made Easy.

Watch, Or Listen To, This Episode
Check Out Meridith's Book

References & Sources

Expert Interview:

  • Powell, M. E., & Nelson-Palmer, B. Succession planning for productivity: How do you stop losing knowledge when people leave? The Productivity Gladiator Podcast.

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I’m Brian. At age 4, I was diagnosed with insulin dependent (type 1) diabetes and told that my life was going to be 10-20 years shorter than everyone else. As a kid I took time for granted, but now as an adult, time is the most precious thing that I have. After spending a career hands-on in the trenches as a leader at all levels, I now train Productivity Gladiators to level up their careers. Graduates wield superpowers in time management, practical leadership, communication, & productivity. If what you’ve seen here intrigues you, reach out, let’s chat!

“Time is the currency of your life, spend it wisely.”

Brian Nelson-Palmer
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