Business Succession Planning – It’s not “if”, it’s “when?”

One of the most ridiculous things I’ve ever heard about business succession planning came from Giuseppe (not his real name) who declared that he didn’t need to worry about succession planning for his business because he wasn’t planning to retire any time soon.  Giuseppe was 79 years old!  He had four sons working in his business, none of whom were young anymore, all with different areas of responsibility “so they will never be in conflict with each other”.

With all due respect to the effectiveness of the Mediterranean diet, if this wasn’t a dead set recipe for disaster – from future family conflict and eventual business meltdown – I’ve been wasting my time working with families for the last 30 years.  The scary thing to me was that this was presented in a “small business journal” in an article that approved Giuseppe’s spirit and business nous.

Business Succession Planning is the process of planning for the transition of ownership, leadership, management and engagement, from one generation to another.  In a family business, this means inter-generational transfer; in a non-family business it also means inter-generational transfer, just not between members of the same family.

Since nobody (yet) lives forever and since we all, eventually, see our best decision-making years pass us by, it’s a fundamental requirement for the sustainability of any organism, or organisation (including families and businesses) to ensure an effective baton pass of the keys to the kingdom (from chromosomes to financial assets), from one generation to the next.

For all creatures, this is what survival of the species is all about. For complex systems like families and businesses, the transition process needs to be planned and managed if the system is to survive and thrive into the future.

Business Succession Planning is often approached as a one-off project, to be undertaken at a point in time.  Unfortunately, because businesses, and especially family businesses, are fundamentally complicated, this usually works out about as well as other projects undertaken on a crisis basis.

And that’s what we’re dealing with here: when business succession is not treated as an integral component of a long-term Business Plan (in a family business – as part of a long-term Family Plan), the fear and uncertainty generated amongst business owners, employees, suppliers, customers, financiers and family members can be extreme.  The business and the family suffer accordingly.

Business Succession Planning, and the implementation of that plan, aren’t overly challenging when there is sufficient clarity, certainty, time and resources available to make things work in a responsible fashion. When a workable plan is developed in consultation and collaboration with relevant stakeholders, it’s like eating an elephant – do it one mouthful at a time (assuming the elephant doesn’t object), and if you have enough time, and a sharp enough knife and fork, it won’t be a problem. Try to do it without adequate preparation and the outcome will be very different.

Commencing a Business Succession Planning process:  we have a one page, 4 Stage, step by step process guide to Business Succession Planning, or just call for a chat.

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