Home
>
Strategic Planning
>
Getting Started with Succession Planning: Part II

Getting Started with Succession Planning: Part II

Succession planning requires the owner of a small or medium-sized business to plan for what the company will look like and how it will operate after the transition to new owners is complete. Unless the owners have succession goals in mind, they won't achieve them. Once these goals are in place, the owners should backtrack and identify the process that will get the firm from its current status to the targeted status after succession. Some of the people involved in the process of transforming the company should be retained as future managers. Others are best utilized just for the transition but not in a managerial or ownership role after succession.

The owner will need metrics to measure the performance of those assisting him with the transition. The owner will want to assess who among the people assisting him with transition are capable of handling and performing well with increased responsibilities. It is helpful to all those involved if they are aware of the metrics upon which their performances will be assessed and also whether they have achieved their transition goals.

The transition plans and performance metrics used in the transition period will become the de facto succession plan. But firms should not think of their succession plans as carved in stone. Instead, succession plans should be living, breathing documents that evolve and are refined on a monthly, quarterly, or yearly basis. Being open to new ideas means that different strategies will be adopted to achieve success than were originally formulated in the succession plan.

Sometimes successors unexpectedly leave the firm, and the plan must have a deep enough talent pool to accommodate personnel or availability changes. When key personnel leave the firm, then the owner must decide whether it is feasible to groom new talent from within the company or whether the particular skill set that has been lost must be found externally.

Business planners also need to be aware of unexpected changes in financial conditions for the firm. Perhaps an infusion of cash that was expected from outside investors will not be forthcoming. In that case, the likely successors of the firm may need business development skills and the ability to attract venture capital or angel investor financing more than was previously thought in the succession plan. Rising interest rates may curtail business investment, and the new ownership team may be required to utilize the existing capital base longer than expected in the original succession plan.

The key to maintaining high employee morale is to communicate these changes in the succession planning and the reasons for the change. If those who work for the company, whether in a leadership position or not, understand how the leadership needs are evolving, there will be less surprise when changes are made to the list of successors. It is always good management practice to communicate to those who work for the firm about changes in the future direction of the firm. Through open lines of communication, owners of the firm may be pleasantly surprised to receive feedback that some members of his current talent pool believe they have the skills and talents now being sought for the future.

Succession planning is just one part of strategic planning. Firms need to have developed strategic plans for their businesses before they can address the future-related issue of successors. However, the strategic plans should help the current owners identify a set of criteria for their successors. With strategic plans that identify how the firm will grow and evolve to the point of transition to new owners, a business will be well on its way to placing the future of the company in the hands of a capable new team.

Dr. Michael A. S. Guth, Ph.D., J.D., is a risk management consultant and practicing attorney at law based in Oak Ridge, Tennessee. In addition, Dr. Guth is a financial quant and former investment banker, having worked for Credit Suisse First Boston and Deutsche Bank in London and Frankfurt. He specializes in developing investment strategies and strategic plans for small and medium-sized companies, as well as mergers and acquisitions for large corporate clients. For five years, he consulted to the electric power and gas industry in the USA, and even managed the Middle Office (financial risk control) groups for two trading floors.

Dr. Guth has taught over 30 courses on-line at the undergraduate and graduate level on topics ranging from Managerial Economics to Strategic Management to Business Law. He can be reached through web page http://riskmgmt.biz/economist.htm

high-end home cleaning Arlington Heights ..

In The News:

Revolutionary retinal implant restores central vision in 80% of patients with advanced macular degeneration, offering hope where treatments once only slowed blindness.

Learn how to use passkeys on Windows and Mac computers without cameras or fingerprint readers. Discover secure authentication methods that replace passwords.

Tesla's FSD v14.1.2 update reintroduces Mad Max mode, enabling higher speeds and more frequent lane changes than the standard Hurry profile setting.

A phishing email scam targeting American Express customers shows how cybercriminals use fake urgent messages to steal personal and financial information.

Facebook's new Meta AI feature analyzes your camera roll photos to create polished collages automatically, but requires cloud processing and raises privacy concerns.

A New Jersey teenager filed a major lawsuit against AI/Robotics Venture Strategy 3 Ltd. over ClothOff, an AI tool that created fake nude images from her social media photos.

Microsoft reports Storm-2657 cybercriminals sent phishing emails to 6,000 addresses at 25 universities to steal payroll credentials and redirect funds.

Astronomers have discovered asteroid 2025 SC79, a skyscraper-sized space rock orbiting the sun in just 128 days. the second-fastest known.

The Fox News AI Newsletter delivers the latest developments form the world of artificial intelligence, including the technology's challenges and opportunities.

A cyberattack on SimonMed Imaging exposed personal information of 1.2 million patients, including medical records, financial details and identity papers.

Spotify's managed accounts for kids under 13 now available in at least seven countries, allowing parents to filter and block explicit content and songs.

Friendly text conversations about BBQs and social events can lead to WEEX gold trading scams that target older adults with fake investment opportunities.

California company Skyeports creates self-healing glass spheres from Moon regolith that generate solar power and support plant growth for sustainable lunar living.

Cleafy researchers discover fake VPN streaming app Mobdro Pro that installs Klopatra banking Trojan, giving attackers full control over Android devices.

Police departments across the U.S. and Canada are adopting virtual reality training to better prepare officers for high-pressure, real-world situations.

House Bill 469 would prevent AI systems from owning property, serving as executives, or gaining legal personhood in Ohio under Representative Thaddeus Claggett's proposal.

Public voter records expose retirees' personal details to election scammers who create targeted cons using names, addresses, and voting history data.

Instead of fearing what comes next with artificial intelligence, think outside the box. Here are high-earning AI jobs that don't require a computer science degree.

OpenAI CEO Sam Altman says polite words like "please" and "thank you" cost millions annually, while direct prompts may improve ChatGPT accuracy by several points.

Chattee Chat and GiMe Chat exposed intimate conversations and photos, revealing users spent up to $18,000 on AI companions before the breach.

New Instagram parental controls allow families to manage teen screen time and content limits through the Family Center with stricter safety settings.

Third-party security breach at Discord exposes sensitive user information including government IDs, highlighting cybersecurity risks from external service providers.

Survey of 1,000 students shows teens using AI for personal relationships while two-thirds of parents remain unaware of their children's AI usage.

Cybersecurity experts warn about a ShadowLeak vulnerability that weaponized ChatGPT's Deep Research agent to steal personal data from Gmail accounts through hidden commands.

Tesla's Full Self-Driving system faces federal investigation following 58 reports of crashes, with six vehicles running red lights before colliding with other cars.

Getting Started with Succession Planning: Part II

Strategic Planning