I am Lee Ann Collins, Managing Partner at Lane Gorman Trubitt, and recently I found myself awake instead of peacefully sleeping. The Notre Dame Cathedral in Paris, France was burning, and I watched the news feeds while praying with the rest of the world. The amazing emergency service teams in Paris were able to put out the fire, saving many lives and the rose window. It had me thinking about how buildings and monuments like the cathedral are a mark of those that came before us. They take a community of people to build and maintain. Long after the architect, builder, and owner are gone, the testament to their vision and dedication remains.
I started thinking about another human creation that does that; businesses. Our businesses are the result of dreaming and thriving to be the best, and the great ones withstand the test of time. Carefully nurturing and planning for the future ensures that businesses outlast their creators and provide lasting legacies for the generations to follow. I know someday I will retire from LGT and happily take my future grandchildren on tours of our historic landmarks in Dallas. I know that there will be a day when I and my cohorts pass this company onto the next generation and I can take the grandkids to the aquarium knowing that the company I helped grow is in good hands. I want everyone to have that same enjoyable retirement knowing that your company is going to thrive after you have exited. Because of that I want to talk about something difficult…succession planning.
Back when Notre Dame was built, business owners were more tradesmen than businessmen. Back then, the succession plan was to teach everything you knew about the trade to your apprentice, hopefully before you died. With the advantage of longer, healthier lives, there is time to train the new generation, make a plan for the direction the company will take when you leave, and still enjoy 20+ years of retirement.
Succession planning is not the same at every company. Sometimes it is just naming the family successor to take over when you die, and sometimes it is a complete reworking of the structure and culture of an organization. When we created our succession plan here at LGT, we read books and articles about succession planning; we created an internal team to evaluate what was needed; we had external companies advise us; we talked to lawyers, HR professionals, and even other accountants to find out what was the best path for us. I could do an entire year of articles on succession planning and probably not even scratch the surface of all the elements. My marketing team has convinced me to keep it brief and to remind our readers that Lane Gorman Trubitt offers business consulting, and if you are ready to begin ensuring your legacy - we are ready to help.
Are you ready to start planning?
If you are retiring this year, it probably isn’t the time to start a succession planning process. Good succession planning should begin 5-10 years before a person is ready to leave the organization. Your plan should be updated on a regular basis and be completely re-evaluated periodically. Good succession planning requires creating a team of internal and external professionals and can take years to craft the right plan for your company.
Timing is important, but there is also an emotional aspect. If you are like me and love your job and company, then leaving, even if it is time, is hard. Thinking about it so far in advance can lead to complex questions about life in general.
Different size businesses are going to have a variety of concerns. Family-owned businesses will have to deal with the fact that your child might not be the best person to take over the business. Medium-size businesses might be dealing with the loss of a founder or the end of a multi-generational legacy. All of these things need to be addressed before you sit down and start talking about the future.
Set a big goal
Does your company know where it stands and what the goals for the future are? A part of succession planning is setting the roadmap for your company. If you don’t know where you want the organization to be in 5 years, 10 years, or 25 years, then that is a good jumping off point. Have an idea of what the legacy you want to leave behind is. No one knows your company like you do, so no outside source can tell you where you are going more accurately than you can. You do not need a 20-page deep dive into your company goals to get started. You can have one or two clear goals, and as you go through this process the succession team will develop the interlocking tasks that will help achieve that goal.
When goal setting, it is important to remember the basic rules. Goals should be specific, measurable, achievable, relevant, and timely. While I would love to set a goal of 200 new clients by the end of the year, that is not an achievable, timely goal. A better goal is that I would like to bring in 75 new clients before our 75th anniversary in 2025.
Build your team
Make sure that when you are building your succession plan you take time to identify and classify all your employees. Who are the individuals that have leadership potential? Are you giving them enough support and education to realize their potential? It is important to have future leaders with the tools needed to lead the company. Being aware of what makes a great leader is very important. Your best performer may be a diamond in the rough that needs polishing and cutting, or they could be the finished product and leadership isn’t for them. A plan for expanding the workforce needs to be a part of your plan and developing the workforce into leaders is a detail oriented-process that spans over the lifetime of the employee.
Overall, succession planning can be a bittersweet process. You are excited about helping shape a company you love and sad that you will eventually leave. But with a good succession plan you can retire happy knowing you left a testament that will withstand the test of time.
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