If your business does not have a succession plan, you need to get started on one right away.
I really don’t mean to scare you, but plain and simply put, every business ought to have a succession plan. If you are under the impression you don’t need one because you’re not planning to make any changes in ownership any time soon … well, I understand you’re thinking. While you may be years away from retirement or a sale of your company, something else may happen, such as an unforeseen accident, or even worse, your death.
Our Lord and maker is the only one who decides that, of course, but you get my point. Who knows what the future holds – and if you do not want your company falling into the hands of someone who may not be able to lead – then you need to get busy creating your succession plan.
How to Create the Plan
A succession plan can be as simple as a one-page, short narrative describing whom the company goes to if the owner retires or leaves. Nothing fancy is needed, but what’s imperative is that those named in the document actually know your wishes. The last thing anyone wants to endure is a surprise; one day you’re the CFO, and the next you’re the CEO.
You need to define the roles of anyone mentioned in the succession plan and have some kind of order to succession that is a good fit with your customer or client base. For example, you may have someone who is great at sales but lousy at leading; you wouldn’t want to put this person in the CEO position.
Visit with everyone mentioned in the plan to make sure they are on board and update the document regularly, in case someone else leaves or other circumstances change. You’ll be glad you did.
Special Situations – After All, We’re Only Human
I’ve seen it happen time and time again. You’re dealing with humans who have real emotions, some who expect they’ll be in the plan only to find out they’ve been excluded. Consider these two special situations:
Family-Owned Businesses – This is where real friction occurs, especially between family members whose egos get the better of them. For example, there are three sons who all think they are your natural successor, but only one can take over. You might consider joint CEOs, but I’ve found even that rarely works due to differing opinions on how to run the company. The bottom line is to choose the son who is the best fit in terms of leading the company for the foreseeable future. The outcome will be difficult for the other two sons, but make it clear as to the “why” behind your decision.
No One Makes Sense – You may be in a situation where no one currently in the company is suitable to take the reins. This certainly happens. If this is the case, look outside your company and begin having conversations with other business owners and professionals to find the right person. You may bring that person on full time, or in a consulting/advisory role.
Don’t ignore succession planning! I’d be more than glad to visit with you to help you wrap your arms around succession planning. My door is always open, so give me a call or email me and we’ll meet.