There is a litany of published material on succession planning. Blog posts, newsletters, articles, and books abound. Most are focused on the practical issues of the process and how to go about it without missing an important matter. All of this is great information and essential to a successful transition of leadership in a business.
Yet, these materials don’t talk about:
- When to begin and why?
- When to finish and why?
- What to do afterward?
Here is my take on it from years of experience with clients and others in my network.
When to start? No later than sixty. Why? At sixty your energy is high and vigor is not an issue. Entrepreneurs are often at their best in their 50s/early 60s. That’s great and most don’t want to plan their succession. Big mistake! This is the time to confront the issue and deal with it effectively when you are at the top of your game.
This, of course, is counterintuitive to the instincts of the typical entrepreneur. They often feel invincible and the engagement in their business and the success they achieve is what makes them who they are. They feel they can go on forever. We all know that isn’t true!
If you start at sixty and complete the planning by sixty-five, you are well-positioned to execute at the time of your choosing.
If pricing is weak when you reach 65, you have time to allow the market to self-correct and pricing to improve. Hopefully, you can complete a sale or transition to the next generation by the time you reach 70 at the latest.
Why is 70 significant? The answer is simple – health. Inevitably, no matter how healthy you are prior to 70, health issues often begin to arise in your 70s.
I’ve seen a variety of health problems experienced by clients, prospects and professional contacts all of which came about in their 70s. The problems range includes cardiovascular, vision, hearing, chronic pain and mobility issues. These problems are very disruptive to one’s life and well-being. This is why, ideally, you want to be done with the succession process by age 65.
What to do after the succession process? You can remain engaged in a variety of ways such as board chair or member, advisory board member, technical advisor or senior consultant available to leadership to consult on key issues. Create your own role to suit your interests, needs and abilities.
If you built a great business prior to 60 and then sold it off or otherwise transitioned out of it by 65, you can direct your time and energy to managing your health issues without the pressure to also run your business. Your quality of life will just simply be better! That is the human side of succession planning that I urge you to act upon sooner rather than later.
Here to Help
If you have a successful business and no plan for succession, reach out to Doug Kennedy at dkennedy@cfos2go.com to discuss your needs and how to plan for them.
For your Talent needs in direct hire, full-time or part-time contract staffing, contact Executive Recruiter, Leesa Meintzer at leesa@2gorecruiting.com.
Doug Kennedy, CFO, Family Office Practice Lead
Doug has years of experience working with ultra-high-net-worth families and the issues that confront them. He designs and leads the implementation of solutions for single-family offices and family-owned businesses. From the foundation of accounting and reporting processes to the broader needs of organization, staffing, and governance, he has experience in formulating workable solutions built around the objectives and values of a family and its vision for multi-generational contributions to society, Doug guides clients through a comprehensive process geared toward achieving and sustaining success of the family.
Leesa Meintzer, Executive Recruiter
Leesa is an executive recruiter with more than 20 years of experience in talent acquisition. She excels in partnering across various business functions and brings a comprehensive perspective to talent acquisition. She works with Engineering, Healthcare, Product, Finance, Accounting, Business Operations, Sales, Legal, Human Resources, Learning & Development, and Talent Acquisition for corporate and high-growth start-ups.