A 'Top Ten List' For Succession Helps Advisors Gain Clients By Example Hot
9. It must be a formalized process. You can’t just designate Junior (or a junior partner) as a successor and be done with it.
8. There must be a jointly created Leadership Profile. What does a family business owner look for in next generation leadership? How do you, as an advisor, envision next gen leadership for your business?
7. Delineate position (job) descriptions and specifically outlined expectations for that position.
6. Outline a formalized evaluation process. This provides a measure against which to benchmark success.
5. Design a back-up/emergency plan. Anything can happen. At any time. You have to be prepared. You have to have a back-up plan, even for temporary illness.
4. Delineate a succession plan for all entities. For families, this entails designing succession plans for the business, for the family itself, and for the family office. Advisors have two of these entities…a business and a family.
3. Create an acceptable compensation plan. The entire family should be comfortable with the compensation for the new business head. Your entire team should be comfortable with your designated successor.
2. Jointly create a written, step-by-step process to facilitate the transition. A transition may not just indicate retirement. It often means someone has died, or is disabled, or is seriously--if not terminally--ill. Having a structure in place may not eliminate all hitches. But it will make the whole process a lot smoother. And much less painful.
1. Gather input and jointly create a workable governance system. Families should create this system together. Advisor partners should create this jointly with input from junior partners, associates, and staff members.
For the next 10 Thursdays, we’ll take a closer look at each item on the list starting with #10. What would it take for you to step up and face the same difficult issues your clients face? Facing these issues takes courage. It also breeds greater authenticity.