Regardless of what you are trying to build in your business, you will need the effort and results of other people.
If you mention that to business people, they will say – “That’s obvious!”
If you put on your succession planning eyeglasses and watch those same business people, you will observe – What’s obvious is regularly forgotten.
If you study business people who have been in business for 30 or 40 or more years, you will confirm – If they build a succession planning team at all then they do it at the last possible minute. Most people put off working on succession planning. Even more people put off developing the team they need for succession planning until they are pressed into doing it. Often they are pressed by a personal health crisis or a surprise departure of a partner or key employee.
Failure to spend up-front time building a succession plan that incorporates other people ensures two problems:
1. When the succession plan is built it will be built under stress, maybe even duress.
2. The resulting value received from the business, if any, will be minimized.
Put another way…
If you want to keep the value of your business low and subject yourself or your successor to a whole bunch of stress then make sure you do no succession planning until the last possible minute. For example:
· wait until you are in the ambulance, with people bending over you with IVs and heart monitors, or
· wait until you are 70 or so years old and your heir-apparent – your 40-something son or daughter – says, “Dad, I have waited as long as I could. I have decided to take a job down the street.”, or
· wait until your competitors bury your long-standing business by recruiting your top 5 people.
…and, it almost goes without saying…never, ever discuss succession planning or your money needs with:
· your family members, or
· your business partners, or
· an accountant, or
· a lawyer, or
· a wealth advisor.
On the other hand…
If you want to maximize the value of your business and maximize the comfort and contribution of your key people then make a habit of treating succession as an ongoing investment in your business. Identify the people who could be vital within your business and who could help you accomplish you vision and goals. Understand their needs and aspirations and learn how those needs and aspirations can be satisfied as you accomplish your vision and goals. Work to obtain the buy-in of key people and inspire their long-term performance. Work continuously at delivering value to these key people in exchange for their expertise. Work to help them accomplish their dreams.
Nurture and develop a successor for your business. Mentor this person. Partner with this person. Make sure this person knows he or she is your most-trusted business ally. Make sure this person wants to be in that role. Do not assume…talk openly and regularly about succession…talk openly and regularly about needs and aspirations, both yours and theirs.
Also, identify unbiased 3rd-party experts who will support your business over the long-term. Build, over time, relationships with those experts. Work to understand their advice. And ensure your interactions with them satisfy their business needs and aspirations.
Ensure your business succession planning aligns with your personal family-needs. Ideally, you will have the full support of a significant other. While this is beyond the scope of this Thought Post, the fact is – very few people achieve material business success without the support of a significant other. Failure to meet the needs of a significant other can have major negative implications on your business. Of course, this can be particularly true if you are involved in a family business. However, the negative impact marital disputes can have on a business is not isolated to family businesses or family. For example, your business and your business partners can be named in legal battles that follow marital disputes.
Regardless of what you are trying to build in your business, you will need the effort and results of other people.
Remember that piece of obvious advice.
And, remember that applies on many fronts. While this is not intended to be a complete or comprehensive list, remember that piece of obvious advice applies:
· to your significant other
· to your family
· to your business partners
· to your chosen successor
· to your key employees
· to the rest of your employees
· to your 3rd party advisors
· to your clients and suppliers
Create plans that cover your needs and aspirations.
Create plans that cover the needs and aspirations of the people who will contribute to your business success.
View all of this work as an investment in your business and your personal success.