5 Succession Planning Best Practices to Make You Immortal
Maybe you don’t want to live forever, but most printing owners would like to build a legacy. You’ve worked so hard to build a business, wouldn’t you like your name, company and its success to live on for future generations? That’s the kind of immortality that appeals to a business owner, and here are five succession planning best practices that can make it happen.
- Choose a successor that possesses the 3 Cs. Let’s start with the most critical item: You need to pick the right successor, and I’ve never found a better benchmark than the 3 Cs: Character, competence and commitment. Does your successor measure up in all three areas?
- Rely on experts to help you choose from family. If you want to pass along the business to a relative, then try and align yourself with a team of outside advisors to choose the right one.
Even if you know who you want as your successor, you should still employ a team from outside the company. Why? They’ll have the objectivity to recommend what your successor needs to succeed in terms of training and support.
You and your successor may get some news that’s hard to swallow, but at least you’ll be getting a straight-up analysis that will only help you in the long run.
- Start your succession planning today - no matter how young you or your company may be. A common mistake is to put off succession planning until a business is in trouble. I can’t tell you how many times I’ve seen execs scramble for a successor because of personal problems, such as divorce or health issues. It’s like trying to buy auto insurance after you’ve been in a car crash.
The sooner you start, the more you’ll understand what your company needs to succeed over the long haul. You don’t need to choose a successor today, but you should have a framework in place in the event that circumstances change.
- Get a valuation. Nothing drives smart decision-making like accurate financials. A valuation report from an independent third-party appraiser will help you truly understand your company’s value and its position in the marketplace.
Not only that, but you’ll also gain insight into what your company needs to do to succeed in the future and compete against top-tier rivals. A valuation will give you and your successor solid benchmarks to initiate strategy.
- Communicate with your company. Don’t just focus all your attention on the captain of the ship. Remember your crew. The people in your organization are going to be extremely jittery about a change in leadership. And you can expect many won’t like the successor you’ve chosen.
Take steps to ensure they respect and understand your decision. Explain to them your strategy. Show them the measures you’ve taken to support and properly train your successor. Then present a clear case of what will happen if they pledge their support as well, and how they can profit.
If you’re searching for immortality, I’m afraid I can’t steer you to the fountain of youth. These succession planning best practices, however, will help you take the proper steps to ensure your company - and your legacy - remain intact for future generations.
(Photo by Sideshowbarker)
Rock LaManna is the President and CEO of the LaManna Alliance. The LaManna Alliance helps printing owners and CEOs use their company financials to prioritize and choose the proper strategic transition – including mergers, acquisitions, organic growth, and exit / succession plans.