How to Build a Succession Plan for Your Tech Company in 6 Steps
A recent Deloitte study found that only 14% of leaders feel their organization is “very prepared” to navigate sudden leadership changes.1 In the tech sector, where the average tenure of a CTO is just 2.5 years,2 this lack of readiness is particularly alarming. For growing tech companies, succession planning helps mitigate risk when key talent leaves — especially in critical engineering, product, and executive roles. In this article, we outline six simple steps tech leaders can take to build a succession plan and help future-proof their organization.
Laying the Groundwork
Before you dive into planning, start by aligning your executive team. Define your goals and create shared ownership across functions. In the tech world, succession planning often loses momentum because it’s seen as “just an HR initiative.” In reality, succession planning is a critical strategic process that addresses risk management and business continuity. As such, it should be championed from the top. That means active involvement and support from the board of directors, C-Suite, and any other senior leaders.
Example: NexBridge, a 275-person software firm, integrated succession planning into its quarterly executive strategy meeting, shifting it from a people initiative to a core business priority.
Tip: Founders and senior executives should lead succession efforts, not just approve them.
Evidence suggests: Succession plans with strong executive sponsorship are far more likely to be implemented successfully.3
Step 1: Identify Critical Roles
The first step in SIGMA’s six-step succession planning process is to identify critical roles. By identifying critical positions, organizations can focus their efforts where leadership gaps would pose the greatest risk. In tech companies, critical roles often include heads of engineering, product leaders, data science leads, and individuals with deep architectural knowledge of proprietary platforms or customer success. These roles aren’t always tied to a title — they’re defined by the impact their absence would have. To begin identifying critical roles in your organization, use SIGMA’s Critical Role Identification Questionnaire.
Example: DevCore, a business-to-business (B2B) software-as-a-service (SaaS) company, identified their Head of Infrastructure as a critical role when they realized that only one person had a full understanding of their cloud architecture.
Tip: Don’t focus solely on executive roles. Consider any position that would slow your team’s momentum or disrupt operations if suddenly left vacant.
Evidence suggests: Succession efforts should begin with high-impact, hard-to-fill roles.4
Step 2: Build Success Profiles
Once critical roles have been identified, the next step is to define what success looks like — not just today, but to support where the organization is headed. Success profiles help to articulate the skills, experiences, and competencies needed to thrive in each position, now and in the future. The SIGMA Success Profile™ template provides a clear framework to guide this process.
Example: ByteTech revised their VP of Product profile to include commercial acumen, cross-functional leadership, and global market experience — anticipating the company’s shift from a North American base to an international focus.
Tip: Don’t just document what the current leader does. Define what the next version of that role must do to drive growth.
Evidence suggests: Success profiles align talent development with strategic direction.5
Step 3: Nominate Successors
In fast-paced tech environments, informal nomination processes often reward visibility over potential — elevating outspoken contributors while overlooking quieter high performers. To ensure a fairer, more accurate process, use SIGMA’s Nomination Survey to facilitate structured nominations and incorporate 360 feedback to uncover overlooked leadership talent.
Example: CircuitStream initially nominated only outgoing, high-visibility team members for leadership roles. After implementing a structured nomination process, the company identified several quieter, highly capable engineering leads with strong leadership potential.
Tip: Use multi-rater input to balance perceptions and avoid overvaluing visibility alone.
Evidence suggests: Objective nomination processes improve fairness and reduce bias in succession decisions.6
Step 4: Assess Development Needs
Once succession candidates have been nominated, the next step is to evaluate their readiness and identify development gaps. Validated assessments add objectivity to an otherwise subjective process, providing key information to make informed decisions about future leaders. SIGMA’s Leadership Skills Profile – Revised™ (LSP-R™) helps identify strengths and growth areas based on role requirements. The assessment measures 50 critical leadership competencies and provides actionable insights aligned with the requirements of each role.
Example: LogicBridge used assessments to identify that their Head of Data Engineering. While technically exceptional, results revealed the need for coaching in strategic thinking and stakeholder influence to succeed as a future CTO.
Tip: Use assessments to distinguish between strong technical performance and true leadership potential.
Evidence suggests: Combining objective assessments with performance data improves the accuracy of talent decisions.7
Using Assessments to Identify Leadership Potential in Tech
It can be difficult to assess leadership readiness in technical experts. While technical roles require deep expertise, leadership demands a different set of skills — such as strategic thinking, communication, and influence. As a result, high-potential individuals may be overlooked simply because they don’t yet demonstrate traditional leadership behaviors. Use assessments to identify potential in technical contributors who may actively pursue leadership roles, such as staff engineers or technical architects, but have the leadership competencies required to succeed. Assessments can help uncover this hidden potential, offering a clearer picture of who is ready — or could be ready — for leadership
Learn more about how to develop future leaders with SIGMA’s Handbook for New Supervisors.
Step 5: Develop Talent
Leveraging insights from a scientifically validated assessment, build individual development plans (IDPs) that align with both organizational needs and personal growth goals. In tech companies, experiential development opportunities — like stretch assignments, product ownership, or cross-functional initiatives — are especially effective. Use SIGMA’s Development Actions Form to record development goals and align growth activities across the short-, medium-, and long-term.
Example: NovaAI assigned a high-potential Director of Engineering to co-lead a major platform migration — an opportunity that provided visibility, influence, and real leadership responsibility.
Tip: Rotate candidates through high-impact projects. This is where real growth happens.
Evidence suggests: Intentional development accelerates readiness and retention of future leaders.8
Step 6: Measure Progress
Once IDPs for succession candidates are in place, it is important to track progress and revisit the succession plan regularly. This step is particularly significant for organizations in the tech industry, where organizational structures shift quickly, and the nature of products and services evolves rapidly. SIGMA’s Talent Progress Scorecard offers a simple way to quantify development, monitor readiness, and communicate progress to stakeholders.
Example: CloudSpan reviewed its succession plan quarterly, tying succession metrics — such as internal promotion rates and bench readiness — to executive key performance indicators (KPIs).
Tip: Treat your succession plan like a living product—review it, measure it, and iterate often.
Evidence suggests: Regular reviews drive accountability and keep succession planning aligned with strategy.9
Final Thoughts for Tech CEOs
Succession planning isn’t just about replacing leaders — it’s about scaling leadership to support sustainable growth. In a sector defined by speed and disruption, this kind of continuity provides an invaluable competitive advantage.
With SIGMA’s six-step succession planning process, you can build a scalable, strategic system for developing and retaining the top talent that your company needs to thrive — today and in the future.
For more information, explore our succession planning services or complete the form below to speak with an expert about how to integrate SIGMA’s six-step succession planning process at your organization.
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1 Deloitte. (2023). 2023 Global Human Capital Trends. Retrieved from https://www2.deloitte.com.
2 Spencer Stuart. (2023). CTO and CIO Tenure and Transitions. Retrieved from https://www.spencerstuart.com.
3 Garman, A. N., & Glawe, J. (2004). Succession planning. Consulting Psychology Journal: Practice and Research, 56(2), 119–128. https://doi.org/10.1037/1061-4087.56.2.119.
4 Rothwell, W. J. (2015). Effective succession planning: Ensuring leadership continuity and building talent from within (5th ed.). AMACOM.
5 Conger, J. A., & Fulmer, R. M. (2003). Developing your leadership pipeline. Harvard Business Review, 81(12), 76–84.
6 Silzer, R., & Church, A. H. (2009). Identifying and assessing high-potential talent: Current organizational practices. In R. Silzer & B. E. Dowell (Eds.), Strategy-driven talent management (pp. 213–279). Jossey-Bass.
7 Silzer, R., & Church, A. H. (2009). Identifying and assessing high-potential talent: Current organizational practices. In R. Silzer & B. E. Dowell (Eds.), Strategy-driven talent management (pp. 213–279). Jossey-Bass.
8 Ready, D. A., & Conger, J. A. (2007). Make your company a talent factory. Harvard Business Review, 85(6), 68–77.
9 Rothwell, W. J. (2015). Effective succession planning: Ensuring leadership continuity and building talent from within (5th ed.). AMACOM.