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How to Boost the Probability of Succession Success: Part I
September 24, 2007
Before we can boost the probability of succession success, we should probably define what we think those two words mean. For us, succession success is exploiting the interdependencies of several factors that act as value drivers in sustaining business continuity through the next generation.
That’s a mouthful, isn’t it? You’re probably asking yourself something along the lines of “What does that mean? And what does it take to make it more likely to happen?” Over the years, we’ve helped business owners define success in their own terms, and there are some concrete ways to exploit those interdependencies.
To begin, let’s list the ten critical elements or interdependencies that need to be exploited:
- Owner motivation and perspective
- Personal financial planning
- Business structuring
- Business performance
- Strategic planning
- Leadership /Management continuity
- Successor preparation
- Management synergy and teamwork
- Family/Partner Dynamics
- Family/Partner Governance
That’s quite a pretty intimidating list of things to juggle, so let’s put them into four broad categories: People, Plans, Process, and Profits. Each of these categories has one or more rules to increase the likelihood of succession success.
PEOPLE
I’ll let you make your own decisions about which of the interdependencies you think fall into this category, but here is my thought: All of them.
The people involved in your succession success have a variety of relationships with you: Spouse, Sibling, (Grand)Parent, (Grand)Child, Partner, Employee, Vendor, Customer, Confidant, and Self. There may be others, but these will do for a start. As the owner, your motivation and perspective really define your personal success, but as some can attest, they can also spell your doom.
Increased Probability of Success Rule #1: Know the difference between a value and a strategy.
Why is that important? Your values provide motivation and vision to those involved with you. Your strategies are the tools you use to manipulate the marketplace; and, sometimes, those who work with you. Unless it’s a visit to a chiropractor, you probably don’t appreciate feeling manipulated.
Next posting: Part 2 - Plans and Processes: How to Boost the Probability of Succession Success
Posted by Dan Schneider on September 24, 2007 | Comments (0)
