Succession Planning : Communication Is the Key to a Seamless Transition
You’ve worked hard to establish and grow your business. You’ve provided quality products and services to your clients – establishing a reputation built on trust and loyalty. You’ve built your team of trusted employees who have shown support and dedication to you and your clients throughout the years.
You care about your business – and that care is clearly shown through your many actions. Sure, it was an emotional journey at times, but your success is a direct cause of your hard work, and all the steps you took along the way. It was far from perfect, but it developed over time into a successful enterprise.
But, nothing lasts forever. And so, you begin to understand the realization that you will be “passing the torch” – transitioning your role from owner/manager to advisor/retiree. Do you have a Succession Plan and Estate Plan in place for this important life transition?
Starting your business was a very intimidating process. Yes, it was emotional; but, as it is so often the case, the hardest part was starting. Once you began, every stage was handled with a clear plan, lots of preparation, some initiation, and above all, ACTION! LOTS AND LOTS OF ACTION!
Transitioning your role in your business is exactly the same. It is an intimidating process with many questions, and far too few immediate answers. It is an emotional step as well. But, with a similar approach, you can handle this obstacle with preparation, planning, initiation and, most of all, ACTION. As a true leader, you care about your family, your employees, your clients and your business. Actively show them all how much you care through establishing and implementing comprehensive, detailed Succession and Estate Plans.
A good Succession Plan should meet the goals of all interested parties – owners, employees, stakeholders and family. This can only be accomplished through an honest communication with everyone involved. A candid conversation is the springboard to a successful plan, but oftentimes, it can be the hardest step. Be truthful about your goals, your business goals, your expectations and ideas – BUT MORE IMPORTANTLY, encourage your employees, stakeholders and family to do the same. Do not make assumptions. This honest dialog is not only an integral step to a clear and instructive Succession Plan, it serves as a deterrent to any misunderstandings and possible future litigation.
For this stage, keep in mind:
- THINK – Consider your personal goals and the goals you have in mind for your business. Remember things like: Estate Plans, philanthropy, retirement income needs, establishing trust funds, investments, how much involvement do you want to maintain, etc.
- ASK – Invite all parties involved to share what their personal and business goals are and where they see themselves in the future of the business and listen with an open mind and heart.
- LIST – Make an inventory of all necessary skill sets required now and into the future and compare that to the existing skill set within your organization. Compare the two and evaluate any potential pitfalls or gaps. Keep this list handy when considering new hires or potential promotions.
- EVALUATE – Honestly assess each employee or stakeholder’s current skills, their motivation level, ability to grow and be a team player. Can they be challenged to step outside of their everyday roles and accept more responsibility in the future? Which are potential leaders and which exhibit industry expertise? If family members express an interest in the business, evaluate each of them using the same honest scrutiny as your employees.
- RETAIN – Tell high-potential employees that they are an integral component of the future of the organization. Let them know the steps necessary for them to be on a “fast track” to a bigger role. This may alleviate any misunderstandings or concerns that might have key employees leave. Also, consider assisting key employees with a new skill set for a larger role in the future for the organization – incentive programs, continuing education and greater exposure can be excellent ways to keep key employees engaged through this transition.