Business Succession Planning

Planning must be considered as much more than just a paper process.  It should be approached as a logical, strategic, and implementable series of steps that need to cover off on:

• human and commercial relationships,
  
  
• ownership,
  
  
• management,
  
  
• staff, and often, family, agendas,
  
  
• personal goals and ambitions,
  
  
• human resource talent and capabilities,
  
  
• stakeholder expectations,
  
  
• business drivers,
  
  
• business models,
  
  

- and so on.

Considerations for your plan should include:

• Developing a timeline that indicates the transition phase, and the associated activities; when ownership and management will be transferred to others; and the time needed to assimilate, mentor or train the new person;
  
  
• Both current and future business requirements;
  
  
• The required job roles and responsibilities, competencies and leadership behaviours;

• How and what is needed to help the newcomer gain confidence and the respect and trust of staff; and
  
  
• How you can ensure continuity during the transition phase.
  
  
• What authority your successor will have and if you want to retain any authority yourself?
  
  

Considerations for passing the business on to a family member

If you are considering a family member as a successor, it is important that you appreciate that any role in the family business is an opportunity and not just a birthright, and family succession may not necessarily be the best option for your business.  So don't automatically assume that the family member you have identified as a successor has inherited your passion for the business; or that they would be the best person to lead the company into the future; or indeed that they would necessarily want to! 

When considering a family member, reflect on these issues objectively:

• Is there someone else in the business, or externally, better placed to take your business forward?
  
  
• Would family values conflict with commercial decisions?
  
  
• Do they possess the right skills, attributes and commitment to the business?
  
  
• Do they appreciate the business - where it's been, how it's got where it is, and where it's going?
  
  
• Have they been given wide experience in all aspects of the business and included in daily decision-making?
  
  
• What would be the commercial basis of any handover to your child?
  
  
• Have they been given opportunities to make important decisions and the ability to learn from the consequences?
  
  
• Do they have the trust of all family members? Would their choice cause conflict in the business?
  
  
• Will family succession provide sufficiently for your future?
  
  

On the other hand you may be considering passing over the reins to an  employee whom you have identified as a possible successor.

Considering a valued employee as a successor

Before you discuss the opportunity with the employee and set a succession plan in motion ask yourself:

• Do they have a commitment to the same values on which your company was built?
  
  
• Do they have diverse skills and experience that will assist the business to grow?
  
  
• Have they had wide experience in all aspects of the business?
  
  
• Would their choice cause conflict in the business?
  
  
• Will they be able to work well with all your stakeholders, and you, during the transition period?

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