04. 05. 2014    |    posted by: Ralph Beck

Succession planning is once again a hot discussion item at U3P Group. However, this time around is different because there is a real sense of urgency. There is a natural inclination to address transition issues quickly as they suggest vulnerability to those at the top, and tend to feed on the impatience of others.

When pushed to describe succession plans, given they exist, there are two common responses—“no need,” or “the accountants and attorneys took care of it.” Both are problematic. The first is easier to address as there are no points of bias in place, leaving an opportunity for all parties to come in clean. The latter situation is often built around tax and estate planning, which while important, represent an incomplete set of requirements.

Succession is not an event; it is a process involving a series of activities leading to some moment of “passing the torch,” and often introducing new conditions. As with most processes, there are many parties, each with their own set of requirements and constraints. You create opportunity by drilling down to understand what the limits are and how they came to be.

The opportunity is the challenging part of the puzzle. When needs are addressed well through each stage of the process, you create value for multiple parties. Without discovering those needs, what ultimately has to occur, and how that was determined, one feels an increased immediacy within the process. Keep in mind that the unstated deeper motives and desires need to undermine the decisions throughout.

Once the true requirements are known and priorities determined, then the puzzle is easier. Tradeoffs in value and alternative methods work to reduce conflict.

Knowing the end requirements allows you to create a plan over time. This plan should lay out each step in the process, aligned with those end requirements.

Notice that this applies to any business whether it is family owned, public, private, or even a non-for-profit. What differs are the requirements. There is no magic, singular way to run “succession.” The process should reflect the organization’s goals and constraints.

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