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Succession planning and succession planning tools

Does your business provide any type of succession planning? Are you preparing your next generation of employees to take over, even if in an "acting" role, if you never hire from within? If you do succession planning do you use any tools, such as what I found on Michigan state government website: https://www.michigan.gov/documents/mdcs/SuccessionPlanningCareerPipelineToolKit_213235_7.pdf Lastly how do you handle succession, especially when it is abrupt and unplanned?

Answers

Bill Noble
Title: CFO
Company: Some Noble Ideas
(CFO, Some Noble Ideas) |

Thank you Wayne for asking because I too am working on succession planning for a rapidly growing family business whose SHs do not have another generation who wish to join that operation. We too are interested in what you may find!

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

The shareholders may want to prepare for a sale having no future generations...

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

Having served in Family Offices and multi generational family businesses, the one thing I tell Heads of Families is that management's first loyalty is to the company and NOT the family. The family is just one of the shareholders (albeit majority or controlling interest). Succession planning should be like any other succession plans. With or without family members. Qualification first and foremost then family affiliation/relationship.

This should all be encapsulated with what I call the Family Governance Document/Agreement which defines the role of the family (and it's members) in the decision making of the company (to include training/succession).

NOT having a family member be the head of the corporation does NOT mean the family has to sell. I have seen outsiders step in while a qualified family member rises. LEGACY (family name or the business directly associated with the family) or the continuance of the business is much more important.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Emerson,

You are correct that many a family business follows this path, as many a family business also cashes out.

It comes down to what is best for the shareholders, not the future generations, and unfortunately, not the company or its employees.

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