Nothing Succeeds Like Success(ion)
Steps to ensure smooth succession.
Visting with the leadership team at McC Inc. while getting background for this issue's cover story (see Pg. 8) opened my eyes to just how valuable a good succession plan can be for any sized company.
Nobody should have to experience the fast-track implementation of a plan like McC Inc. did after losing two top executives in a plane crash last June, but accidents do occur. As do retirements, changing jobs, buy-out packages, company sell-offs; well, you get the picture.
If you're unsure where or how to get the process rolling, fear not. There are plenty of financial advisors, attorneys and consultants who can get you started, or if you've already begun the process or have a plan in place, could help you fine-tune your approach.
In touring around the various sites dedicated to succession planning Googling does have its merits most sources agree on some basic tenets of succession planning, including:
Use a team approach: You'll want to tap into the expertise of your financial, legal and operations heads to create a well-rounded plan.
Incorporation: Corporate status ensures "perpetual existence" even in death and disability of the owner in addition to limiting liability.
Find a successor: You don't want a lengthy learn-as-you-go transition process so make a choice and train that person yourself. After all who would be better at grooming your successor than you.
Make a business will: Make sure your succession intentions are known in writing and include your succession plan and, if necessary, name your successor, too. Inquire about a "buy-sell agreement" as a way to protect your company's interest also.
Be transparent. Once you've created a succession plan be sure to talk it over with all affected parties (especially family members). Being left in the dark will destroy trustfulness and has ruined many a family.
Insure the plan: Having adequate liquidity to keep the business running in the event of a triggering event should not be a problem if you're properly insured.
You owe it to yourself to be serious about your succession planning, but more importantly you owe it to your employees and their families' futures, to be serious about it, too.