When should I start my actual succession
planning? I hope to leave my business in about a year and am starting to believe that I need more time. Thanks. JM (Los
Angeles, CA)
This is one of the most frequent questions that I'm asked, and though
my temptation is to answer with the typical, "It depends," I think it would be most helpful to present some underlying guidelines.
In my experience, most successful owners have a variety of issues
that need to be addressed when making a rewarding and successful transition from their business. In our initial discussions
we'll go over such things as transition vision (including the vision for the business, the owner's post-transition life, etc.),
personal preparation and alignment and business readiness and value. This is where my "it depends" answer comes into play. "How
long" depends on the owner's goals, personal and business readiness and even the readiness of key stakeholders.
Having said that, let me try to give you an answer that will be helpful.
Typically speaking, the "runway" should support the "landing." That
is, if there is considerable work to be done in order for the owner to reach his or her goals they should start planning
five years before the time of their departure. In nearly every instance, the owner can reach many of not all of their succession
goals in this time frame.
Having said that, I know that in many instances circumstances just
won't allow for five years. Consequently, after meeting with the owner and other stakeholders - including family members,
possible successors, key managers, etc. - I'll prioritize the work plan (or "critical path") to accomplish the items that
will have the greatest impact first, and then addressing other items. This can be particulalry helpful for owners who (for
whatever reason) need to move things forward somewhat quickly. Keep in mind that I've actually guided owners through their
succession, including a shareholder agreements and ownership transition, in less than 60 days! As you would probably
guess, the pressure of working in a shorter time frame revealed some shortcomings that are now being addressed.
