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Succession Planning for Succession Success: 'Tis the Season
December 17, 2007
During this traditional season of gift giving and celebration, it’s more than appropriate to talk about the connection between strategic planning and succession success. After all, it’s the gift that keeps on giving through generations still to come.
Over the last few months, my partners and I have written about the elements of succession success. Unlike the days of Christmas, there are 10 rather than twelve. Those ten elements of succession success are:
1. Owner Motivation and Perspective;
2. Personal Financial Planning;
3. Business Structuring;
4. Business Performance;
5. Strategic Planning;
6. Successor Preparation;
7. Leadership Continuity;
8. Management Teamwork and Synergy;
9. Family Governance; and,
10. Family Dynamics.
As you look at them in the order presented above, you can see that strategic planning is the centerpiece on this mantel. The connections may not be obvious at first glance, at least they weren’t to me, so here’s the process that led me down this road.
Almost every strategic plan begins with a mission, vision, or purpose statement. That statement usually includes a list of values important to the organization. Some people make a big deal out of the difference between mission and vision, or mission and purpose.
They may be right to do so, but I prefer a more practical approach. I think we simply have to answer a simple question: What is the owner’s motivation and perspective on the business? That comes from answering two simple questions: What business should we be in? What is our purpose for being in that business?
The purpose usually isn’t money. If the business performance is strong, however, money happens. Then comes a need for personal financial planning, which may or may not require a change in business structuring.
Every business has critical issues categorized as strengths, limitations, opportunities and threats. If you look at the business this way, you can quickly judge whether successor preparation, leadership continuity, and management teamwork and synergy are strengths or limitations. Recognizing these elements for what they are allows you, the business owner, to begin developing or revising plans to exploit existing strengths or put some in place. More often than not, this will involve some version of recruiting and/or retention of high level talent.
Over time, Family Governance and Family Dynamics impact the day to day operations of the business. Some family members believe they have to earn their way into the business. Others believe they are entitled to share in the gifts. The former have a stakeholder mentality; the latter an entitlement mentality. In the next blog, we’ll talk about how to use strategic planning to package, wrap, and give the gift of a stakeholder culture.
Posted by Dan Schneider on December 17, 2007 | Comments (0)
