The prospect of exiting your company in the hands of someone else likely brings mixed emotions. You’ve no doubt spent a substantial amount of time and a great degree of effort in getting your enterprise to where it is today. So, as the saying goes, parting will be such sweet sorrow.
Yet, when it comes to creating and executing a succession plan, decisive action is critical. You’ve got to respect the importance of timeliness — not only for you and your family but also for your successor and employees.
Two Key Questions to Answer When Succession Planning:
1. When’s Your Target Date?
By designating your departure date far enough in advance, you’re more likely to pick the right successor, as well as facilitate a smoother transfer of power.
In some industries, it can take years to appoint and train a qualified successor and effectively work through the many management, ownership and organizational issues. But don’t choose a date too far away, because your successor-to-be may get tired of waiting.
2. How Will You Break the News?
Maybe it’s many years away, maybe it’s sooner than that. But don’t wait too long to reveal to staff when you’re leaving the company and whom you’ve selected as a replacement. Giving everyone ample notice (as long as one to two years) will allow plenty of time for employees to voice their concerns about your successor and the transition as a whole.
Break the news gently to gain their support for the new boss while giving employees good reasons to stay with your company. If disagreements arise, discuss the issues openly. Seek compromise by enabling your successor to exercise his or her newfound decision-making authority but staying involved as a consultant to ensure he or she doesn’t alienate staff.
Need some help?
Coming up with — and carrying out — a succession plan can be among the most difficult things a business owner ever does.
Please contact us for help assessing the financial and operational viability of your plan.