Loyd Rawls

10 Steps to the Development and Implementation of an Exit Strategy
April 30, 2008

The “Exit Strategy Dilemma” acknowledges the challenge of patronizing the needs and goals of both current business owner and the business. Time line appears to be the hinge pin of this dilemma because the owner wants to keep their options open and businesses need to address strategic needs, issues and vendors.

The circumstances of the business can impact the amount of time needed to pull off the succession strategy. Reciprocally, the time available commonly dictates the practical steps of an exit strategy. Just “getting the hell out of Dodge” and tossing the keys to a family member or the senior manager is not a significant challenge. However, transferring leadership and management control in a manner that has optimum impact on both the owner and the business requires time forethought which is another way of saying time.

As we consider the exit strategy time line, we should review the Ten Steps to the Development and Implementation of an Exit Strategy which can vary according to the business but generally include:

1. Tentative confirmation of a time line by owner, CEO and/or Board,
2. Discussion of owner/CEO’s personal circumstances and business circumstances impacting the selection of a successor with family, management, franchisers, Board, etc which should include:
   1. Availability of successor candidates; internal versus external,
   2. Immediate contingency planning,
   3. Reasonable time line for confirming, preparing or recruiting successors,
   4. Confirmation of candidates or the general prerequisites of a candidate, and
   5. Confirmation of retention incentives for any internal candidates that may be vulnerable to recruitment by competitors.
3. Communication of time line to organization,
4. Preparation, evaluation and/or confirmation of candidates,
5. Confirmation of successor and communication to organization,
6. Discussion and confirmation of the successor’s desired management support team,
7. Transition of management and leadership responsibilities,
8. Transfer of management and leadership responsibilities with coaching and encouragement,
9. Placement of management support, and
10. Ongoing consulting, coaching and encouragement.

In consideration of your exit strategy, the time allowed will dictate if you can give each of these steps the attention needed to address both the needs of the departing owner/CEO and the business.

We will discuss the ideal time line and the minimum time line next.

Posted by Loyd Rawls on April 30, 2008 | Comments (0)