Planning Your Succession Management

One of the greatest challenges in business is passing the baton of leadership onto the next generation. It is not easy to find someone who has the same values and vision as you do whether from family members or employees. What’s more difficult is when your own children show little interest in taking over the business once you are gone. According to experts, there are four crucial steps every pioneer should take to solve this problem.

The first step is to plan ahead. Finding someone to succeed you does not take overnight. In fact, your plan may unfold only after several years of waiting. Therefore, perfect your succession plan by looking for potential people and grooming them to take over your position. The potential person may be one of your children or even one of your employees. Just make sure you train them in such a ways that they will treat the business the way you do.

During your planning stages, create a quality recruitment management team. A strong management is the secret to a successful business plan. Aside from the main players, you will need reserves just like in sports. This will give you the assurance that your successor will be supported by talented and skillful individuals.

To eliminate confusion and unnecessary misunderstandings, make it clear to your successor what his role will be once he has taken over the business. Show him what title he is going to hold and the responsibilities that come with it. Do this by giving him guidelines that reflect your own goals and expectations. Moreover, make it clear to your successor the exact point when he can take on the leadership role next to you.

Aside from building a good succession plan, you should also consider what your exit mechanism should be.

There are actually a lot of ways to exit once you have passed on the baton. One is to consider helping your successor purchase your company share. Another is to consider taking your money off the table. In simple terms, make sure you have a good liquidity plan before you make your exit.

In conclusion, whatever succession and liquidity plan you use, put in mind that these two factors are linked with each other. Therefore, have not only your company’s future in mind but your employees’ and family’s as well.