Succession and exit are of crucial concern for you, other current leaders in your firm and those who will follow.
For many leaders, succession and exit are in the future, years from now, so why worry about that today? To these executives, and really any active leader, I say, “Congratulations!” Amid the layoffs, liquidations, closures and foreclosures, your venture is standing. WOW!
But, your challenges aren’t over. Having survived, you are now facing a new career hurdle. Can you identify your organization’s next leader who, with mentoring, can take your organization to the next level? Succession takes time, sometimes more than one try. If you say your exit is years away, that’s great because you’ll probably need every one of those years.
You’ve brought the company this far, who can take it further? Besides, it’s time for you to find your next project. You probably have a new idea. You have them all the time. Maybe a new enterprise, a lifestyle venture like a bed and breakfast or sports shop. Maybe you’ll buy stock in a resort you’ll move to and serve on their board.
Regardless of whether you are considering your succession and exit this year or in 20 years, now is the time to begin preparation. You object, “Oh, but I have a plan.” When was this plan last updated? Most organizations with less than 50 employees have exit plans like they have business plans, strategy and budgets – mentally but not written intelligently so their attorney, accountant and family members could understand and implement.
Attorneys suggest including dissolution provisions in partnership and corporation agreements when firms are begun. They recommend succession and exit options from the very beginning for good reason. For similar reasons, it’s of great importance to have and maintain succession, transfer and exit plans for you and your key employees. Cross training and key person insurance are part of it, but there is much more that works together to improve your firm’s stability and sustainability. You and, I am sure, several other employees, are very important to your firm for maintaining major client, banking and financial relationships.
It’s one thing for a leader to be absent a few days or a week. If one or several of you were absent for an extended period, would your operations be endangered? It’s good to review and improve the ability of multiple persons to step into different leadership roles for several reasons:
- Prepare for the eventuality of someone important being unavailable or,
- Stimulate change and innovation when a department has become sedentary.
Given our current technological, social and competitive environment, change is rarely comfortable but like it or not, it’s good for us and the organization.
Besides, entrepreneurs don’t or can’t stop being entrepreneurial, they (or we) are serial entrepreneurs. Once a person is successful in a venture, it’s hard not to want to do it again, only better.
It’s fun. It’s exciting. It’s dynamic, challenging and rewarding. It can also be terrifying when a business goes sideward fast and crashes. Let’s avoid crashing! Let’s routinely do staff development. Let’s identify and mentor our future leaders. There will always be surprises but we can minimize loss by preparing in advance.
