SUCCESSION
PLANNING	
  
Presented	
  by:	
  
Wm.	
  (Chip)	
  Valu9s,	
  PhD	
  
www.pcg-services.com
The	
  final	
  test	
  of	
  greatness	
  in	
  a	
  CEO	
  is	
  
how	
  well	
  he	
  chooses	
  a	
  successor	
  and	
...
SUCCESSION	
  
	
  The	
  phrase	
  implies:	
  
	
  
•  An	
  Event	
  —	
  occurs	
  the	
  day	
  the	
  boss	
  quits	...
Succession	
  is…	
  
A	
  new	
  beginning	
  	
   A	
  process	
  	
   A	
  racetrack	
  (con:nuous)	
  
psdcollector.bl...
A	
  journey	
  
Most	
  of	
  all,	
  succession	
  is…	
  
fineartamerica.com
ADEQUATE	
  PREPARATION	
  IS	
  THE	
  KEY	
  
	
  This	
  includes:	
  
•  An	
  agreement	
  or	
  willingness	
  to	
 ...
CRITICAL	
  MILESTONES	
  
1.	
  Entry	
  of	
  the	
  next	
  genera9on	
  
2.	
  Agreement	
  to	
  perpetuate	
  the	
 ...
Guide	
  to	
  Obstacles:	
  
A	
  Checklist	
  for	
  Failure	
  
•  Secre9ve	
  environment;	
  liRle	
  communica9on	
  or	
  candor	
  
•  Triangula9on:	
  Communica9ng	
  concerns	
  t...
TIPS	
  FOR	
  SUCCESS	
  
The	
  Business	
  
•  Clear	
  responsibili9es	
  and	
  appropriate	
  
authority	
  
•  Acco...
TIPS	
  FOR	
  SUCCESS	
  
	
  The	
  Family	
  
•  Support	
  and	
  encouragement	
  
•  Non-­‐family	
  mentoring	
  
•...
TIPS	
  FOR	
  SUCCESS	
  
The	
  Advisors	
  
•  Clarify	
  roles	
  and	
  boundaries	
  
with	
  the	
  owner/family/
b...
TOOLS	
  TO	
  PREVENT	
  PROBLEMS	
  
•  Guidelines	
  for	
  entry	
  into	
  the	
  business	
  
•  Formal	
  developme...
QUESTIONS	
  PARENTS	
  MUST	
  
ASK	
  THEMSELVES	
  
•  Do	
  I	
  listen	
  openly	
  to	
  my	
  son/daughter	
  about...
QUESTIONS	
  _____	
  MUST	
  ASK	
  THEMSELVES	
  
•  Have	
  I	
  aRempted	
  to	
  impart	
  all	
  I	
  
know	
  about...
QUESTIONS	
  SUCCESSORS	
  MUST	
  
ASK	
  THEMSELVES	
  
•  Do	
  I	
  feel	
  capable	
  of	
  managing	
  this	
  busin...
QUESTIONS	
  SUCCESSORS	
  MUST	
  
ASK	
  THEMSELVES	
  
• Whatever	
  my	
  role,	
  do	
  I	
  willingly	
  offer	
  to	...
Ques:ons	
  Advisors	
  Can	
  Ask	
  
prometheism.net
apinke.com
ashtarcommandcrew.net
plus.google.com
•  Are	
  you	
  fully	
  commiRed	
  to	
  family	
  succession?	
  	
  Is	
  it	
  a	
  dream	
  
you	
  deeply	
  feel?...
While	
  the	
  journey	
  can	
  be	
  difficult,	
  those	
  that	
  succeed	
  
enjoy	
  many	
  benefits.	
  	
  Be	
  de...
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A Guide for Family Business Succession Planning

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A Guide for Family Business Succession Planning

  1. 1. SUCCESSION PLANNING   Presented  by:   Wm.  (Chip)  Valu9s,  PhD   www.pcg-services.com
  2. 2. The  final  test  of  greatness  in  a  CEO  is   how  well  he  chooses  a  successor  and   whether  he  can  step  aside  and  let  his   successor  run  the  company                              Peter  Drucker   www.dill.com.br
  3. 3. SUCCESSION    The  phrase  implies:     •  An  Event  —  occurs  the  day  the  boss  quits   •  An  End  —  seen  as  a  des9na9on  or  date  in  9me   •  Nega:vity  —  being  pushed  out  the  door  or  placed   on  a  shelf;  influence  stops   •  A  Barrier  —  something  that  must  be  overcome  or   removed  
  4. 4. Succession  is…   A  new  beginning     A  process     A  racetrack  (con:nuous)   psdcollector.blogspot.com en.paperblog.com www.123rf.com
  5. 5. A  journey   Most  of  all,  succession  is…   fineartamerica.com
  6. 6. ADEQUATE  PREPARATION  IS  THE  KEY    This  includes:   •  An  agreement  or  willingness  to  go  on   the  trip   •  A  common  des9na9on  and/or  general   direc9on   •  Milestones  for  monitoring  progress   •  Fuel  to  sustain  your  journey   •  Fundamental  skills  for  dealing  with  trouble  
  7. 7. CRITICAL  MILESTONES   1.  Entry  of  the  next  genera9on   2.  Agreement  to  perpetuate  the  business   3.  Comple9on  of  strategic  plans   4.  Comple9on  of  estate  and  financial  plans   5.  Iden9fica9on  of  a  successor   6.  Transi9on  of  power  and  control   7.  Competence  and  sa9sfac9on  in  new  roles   www.theolympian.com
  8. 8. Guide  to  Obstacles:   A  Checklist  for  Failure  
  9. 9. •  Secre9ve  environment;  liRle  communica9on  or  candor   •  Triangula9on:  Communica9ng  concerns  to  anybody  but  the  source   •  Conflict  which  has  remained  ac9ve  and  unresolved  for  years   •  Mystery  guests:  impact  of  spouses  and  others  not  directly  involved  in  the   business   •  Families  who   stuff  their  feelings  un9l  periodic  explosions  occur   •  Family  dynamics  and  issues  
  10. 10. TIPS  FOR  SUCCESS   The  Business   •  Clear  responsibili9es  and  appropriate   authority   •  Accountability  and  consequences  for   performance   •  Construc9ve  conten9on   •  Sound  decision  making  and  problem  solving   •  Clear  boundaries   www.pwkoffice.com
  11. 11. TIPS  FOR  SUCCESS    The  Family   •  Support  and  encouragement   •  Non-­‐family  mentoring   •  Appropriate  educa9on  and   outside  experience   •  Freedom  to  risk   •  Conflict  management  and   communica9on  skills   www.upwardonward.com
  12. 12. TIPS  FOR  SUCCESS   The  Advisors   •  Clarify  roles  and  boundaries   with  the  owner/family/ business   •  Challenge  clients/deliver  bad   news   •  Facilitate  understanding   instead  of  agreements   •  Encourage  mul9-­‐discipline   interac9on   www.actioncoach.com
  13. 13. TOOLS  TO  PREVENT  PROBLEMS   •  Guidelines  for  entry  into  the  business   •  Formal  developmental  plans   •  Family  councils,  mee9ngs  and/or  retreats   •  Codes  of  Conduct   •  Mission  Statements  or  Family  Creeds   •  Advisory  Boards  or  outside  mentors  
  14. 14. QUESTIONS  PARENTS  MUST   ASK  THEMSELVES   •  Do  I  listen  openly  to  my  son/daughter  about  his/her  plans  for   the  business?  Do  I  encourage  such  dialogue?   •  Am  I  able  to  encourage  autonomy  and  hand  over  areas  of   responsibility  to  my  successor?   •  Do  I  feel  confident  about  his/her  leadership  abili9es?   •  Am  I  able  to  take  9me  away  from  the  office  without  worrying   and  constantly  checking  in?  
  15. 15. QUESTIONS  _____  MUST  ASK  THEMSELVES   •  Have  I  aRempted  to  impart  all  I   know  about  running  the   business  to  my  successor?   •  Do  I  trust  my  successor s   judgment  when  it  comes  to   handling,  spending  and   alloca9ng  company  money?   •  Have  I  openly  championed  the   talents  of  my  successor  to  our   clients?  Allowed  him/her  room   to  deal  with  them  without   interference?   www.bjgoldreflections.com
  16. 16. QUESTIONS  SUCCESSORS  MUST   ASK  THEMSELVES   •  Do  I  feel  capable  of  managing  this  business?   •  Do  I  have  enough  experience  to  run  this  business?   •  Do  I  have  a  clear  plan  for  how  I  would  run  the  business?   •  Am  I  willing  to  take  on  as  much  responsibility  for  the  business   as  my  parents  do?   •  Do  I  understand  and  respect  my  parents  way  of  managing   the  business?  
  17. 17. QUESTIONS  SUCCESSORS  MUST   ASK  THEMSELVES   • Whatever  my  role,  do  I  willingly  offer  to  take  on  more  of   the  business  and  try  to  master  it?   • Do  I  seek  out  and  ini9ate  projects  of  my  own  and  follow   through  on  them?   • Am  I  able  to  seek  out  and  listen  to  my  parents  advice  and   comments  on  my  performance?   • If  cri9cized,  can  I  accept  and  objec9vely  evaluate  the   feedback?   • Do  my  siblings/family  and  I  share  a  common  vision  for  the   business?  
  18. 18. Ques:ons  Advisors  Can  Ask   prometheism.net apinke.com ashtarcommandcrew.net plus.google.com
  19. 19. •  Are  you  fully  commiRed  to  family  succession?    Is  it  a  dream   you  deeply  feel?   •  Will  your  spouse  and  you  be  financially  secure  a]er   re9rement?   •  Will  you  choose  a  successor  and  set  a  firm  date  to  pass  the   baton?   •  Do  you  truly  believe  there  is  life  a]er  re9rement?   •  Does  an  absorbing  new  challenge  or  interest  await  you  a]er   you  leave?   •  Are  you  able  to  delegate  decisions  and  authority?   •  Are  you  willing  to  let  others  take  new  business  risks?   •  Do  you  trust  key  people  with  financial  informa9on?  
  20. 20. While  the  journey  can  be  difficult,  those  that  succeed   enjoy  many  benefits.    Be  deliberate;  be  courageous.     Work  the  issue  with  sincerity  and  expect  the  best   from  each  other.    The  rewards  are  many.     Good  luck!!  
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