Succession Questions (Imagined and) Answered
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I didn’t actually solicit questions before writing this article, but I get questions about succession all the time. Companies with good succession strategies in motion are so much healthier than their counterparts. Few topics are more important or misunderstood, so I thought I’d “imagine” some questions for this article and run a little imaginary Q&A. Feel free to send me your real questions if you’re so inclined!
How can I think about the future when I’m so busy right now?
There is a part of your brain that needs to live in the future at all times. I don’t care how busy you are right now or how much pain you’re in with your business today. Every decision you make impacts your business’s future, so you must always consider the second and third order consequences of your actions.
For example, you might say, “We’re cash-strapped right now. We need to cut overhead.” You might be right, but how will these cuts impact the business in the months and years to come?
That part of your brain living in the future should be consulted on every TODAY decision. Succession planning is really about considering your future and that of your team in relation to your goals. I know I want to generate $10M in Net Profit by 2030. What roles will we need to fill to get there? Who do we have that can step into those roles? How can we get them ready? What roles will I play along the way? Etc...
Do I really need to know how I’m going to sell the business someday? I mean, it’s so far away!
Ownership succession is a piece of the equation that gets a lot of attention. How you plan to exit the business matters, but not as much as you think. Whether you want to sell it to a third party, some key employees, hand it to your kids, or create an employee stock program doesn’t change this fact: for any of these avenues to be truly successful, the company must be well-run and profitable without a reliance on the exiting owner(s). It’s good to have a vision for your exit. How much value you want to build will guide all kinds of decisions along the way, and knowing if you’re trying to attract a competitor or private equity buyer will focus you on certain KPIs, but if you want to exit before you die, the non-negotiable is to ensure things are running great without you there.
How could I possibly step away from the business? It’d be dead without me!
I feel like at least 50% of my articles are about solving this problem, so I’ll be brief and direct. Get. Out. Of. The. Way. The best leaders working in the best companies are all actively hoping someone under them can take their job someday. They know that their successful development of their staff increases their value to the business rather than rendering them obsolete. If you want your leaders to train their replacements so they can level up, be sure they know you have their back and prove it time and again by promoting the best people-developers on your team. Leadership succession is practical, doable, and essential for growth.
Sidenote: if you, the owner, are reluctant to hand off your leadership roles to others, just understand that you are the bottleneck. You’ll lose high-potential people, and the business will stall out. Just sayin.
How can I move people up to take my roles without people behind them?
You don’t. Repeat after me: “Want a promotion? Find and train your replacement!”
How far out should I look?
As far out as you can credibly see. I like to see a long-term vision (10+ years) with a 3-year plan. It’s okay if you can’t dream that far out right now, but with active business improvement in the short-term, you should begin to see further out in time.
When should I begin succession planning?
Right now, please. Thanks.
For more on this topic from a fantastic case-study to emulate, please listen to our great friends and clients at Sargent, a 500+ employee site contractor who has executed both ownership and leadership succession brilliantly over the past 15 years.
The Spark Notes:
You must habitually engage the part of your brain that lives in the future—every “today” decision needs a quick consultation on its second- and third-order consequences for your long-term goals.
While exit strategy details (third-party sale, ESOP, family hand-off) are useful guides for value creation, the non-negotiable is that your company must run profitably and independently of you before you even think about stepping away.
Great leaders actively develop successors—get out of the way, signal you’ve got their back, and reward those who build bench strength, because bottlenecked leadership stalls growth and drives top talent away.
Start looking as far out as you credibly can (think 10-year vision with a rolling 3-year plan) and begin succession planning right now—seriously, there’s no time like the present.
