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Build a Succession Plan to Ensure Business Continuity

Make sure future leaders are ready to take the reins.

A group of people walking in front of a spotlight.

Executives say identifying future leaders is vital for reaching business objectives, yet fewer than half have formal succession plans in place at their companies, surveys show. That’s a problematic disconnect that could leave organizations unprepared for the challenges that lie ahead. 

“What made you successful in the past is not going to help you survive and thrive in the future,” says Amy Hirsh Robinson, principal of Interchange Group, a consulting company based in Los Angeles.

But many leaders may need a push to engage in this type of forecasting, since the mere mention of succession planning can prompt a host of emotions, says Robinson, who gave advice to HR professionals at the Society for Human Resource Management’s 2018 Annual Conference & Exposition in June. They may be reluctant to share their knowledge with someone who might replace them—no matter how far off that time is. 

That’s why it’s important for HR to build a business case for succession planning and to help their senior team put the necessary time and thought into the process. With executives’ input and support, HR professionals can create career development plans to ensure that high-potential workers get the experience they need to be future leaders.

succession planning and business continuity

While succession plans often focus solely on getting a replacement ready for those in the highest ranks, they should cover the roles of anyone whose sudden departure could disrupt the business, says Kelly Renz, president and chief executive officer of Novo Group Inc., in Brookfield, Wis., who also presented a session at the Annual Conference.

“Succession planning protects the business from unexpected changes that could potentially hurt the business,” she says. It can also increase retention of top performers and drive deeper engagement of managers by encouraging them to “own” talent development, she says.

To help ensure a successful process, HR should:

Ask leaders to identify future needs. What skills will tomorrow’s leaders need to meet business goals? Where are the gaps between the skills represented in the current talent pool and the skills that will be required in the future? 

Establish credibility by putting current leaders’ wishes first. “Your expertise is critical, but it doesn’t matter unless you position yourself as working to meet their needs,” Robinson says.

While each company has unique requirements, current trends suggest that future leaders must be able to deal with economic uncertainty and labor market changes brought about by automation. They’ll also have to be adept at crisis management because social media allows individuals to reveal a company’s mistakes quickly and publicly. Finally, they need the ability to persuade the workforce to move in different directions, she says.

Agree on a clear definition of a successful leader. Instead of relying on job descriptions, build a “success profile”: a one-page outline of what competencies and skill sets are needed to succeed. Interview leaders about what would make someone perform well in their roles. Otherwise, bias can creep in when people don’t agree on who should be considered “high-potential.” Leaders might choose their favorites to replace them, even if those individuals don’t have the right skills, Robinson says. Having a formal succession plan can help create a more objective process.

Define the goal and select the appropriate data to use. The data can help identify skills gaps and growth needs in your workforce so training programs can better support individuals’ development.

Identify possible future leaders. Some employers prefer to avoid the term “high potential” because it can make other employees feel inferior, Renz says. She recommends categorizing workers as “early career,” “midcareer” and “senior career” so you can plan development opportunities that fit their specific needs.

Keep it simple. Robinson isn’t a fan of the 9-box grid, a tool commonly used to assess talent within organizations and their readiness for promotion. The grid’s vertical columns indicate growth potential, and the horizontal rows identify whether the employee is currently below, meeting or exceeding performance expectations. Executives are busy and will disengage if the process is too complicated. She uses a simpler 4-box grid instead.

succession planning and business continuity

[SHRM members-only HR Q&A: Succession Planning: What is a 9-Box Grid?]

Develop an action plan. It should be visible, measurable and shared. Create development action plans for each person in the high-potential, or “acceleration,” pool, Renz says. You might use a rotational program to help employees meet others in different departments. Pair each person with a more senior mentor to encourage knowledge sharing. The action plan should help you decide where and how to spend your time and money, she says.

Start small. Create a proposal, and include supporting data to show executives how the succession plan will work and how it will benefit the organization. Establish a pilot program; that will allow you to refine the plan before it is rolled out to the whole organization, Renz says.

Be transparent. Let employees know they are being developed for higher-level positions. If you fail to give them career development opportunities, they may feel ignored and decide to leave, Robinson says. 

Create a positive perception. The term “succession plan” can have a negative connotation for employees if they’ve only heard it used when someone is getting fired, says Jenny Chalifoux, quality assurance and improvement manager at Kings County Behavioral Health in Hanford, Calif., who also works as a consultant. Help employees understand that a succession plan isn’t only about filling sudden gaps. “It’s also for the growth of the organization and the opportunity for the staff who demonstrate dedication and proficiency,” Chalifoux says.

Update the plan regularly. Have regular conversations with leaders about their roles and document any changes. Refresh formal data once a year at a minimum. Share your progress and challenges with leaders at least quarterly, Renz advises.

In the end, a carefully crafted succession plan will not only help you prepare for the future, it will also help you engage and retain top performers in the present.  

Dori Meinert is senior writer/editor for HR Magazine.

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succession planning and business continuity

Continuity and Succession Planning: What's the Difference?

         

            Succession planning has been a hot topic in the industry for good reason - only 19% of independent advisors have an actionable succession plan in place. From research conducted in a survey that Find Bob facilitated, we know that 80% of advisors do not have a written succession plan and 75% of advisors do not have a plan for the continuity of their business in the event of a death or disability - but what is the difference between a succession plan and a business continuity plan? There has been much confusion on these two vital, but different plans that advisors should have in place for the benefit of their business, their clients, and their loved ones. If you find yourself scratching your head at the thought of the distinction between a business continuity plan and a succession plan, you’re not alone. In this post, we will take you through the basics, main differences between, and benefits of both a business continuity and succession plan.

All About Business Continuity

          Simply put, business continuity is concerned with making sure that a business is able to provide continuous service to its clients at an acceptable, predefined level, despite any events that might impact the organization.  When that organization is in the form of a sole proprietorship, it is solely the responsibility of that sole proprietor to ensure that their book of clients will be served at this predefined level despite any events that could impact the owner, such as a death or disability. Considering the previously stated fact that 75% of advisors within the financial services industry do not have a business continuity plan in place, that makes death or disability the #1 threat to single-owner practices in terms of ensuring the continuity of service to their clients.

          The reality is that there are threats which could lead to catastrophic events, which any person could be impacted by, whether or not they are a business owner. The unique responsibility of a business owner is to recognize and mitigate against these very real threats, in order to ensure that the clients they serve year after year are taken care of despite such an event. The even more unique circumstances of a sole proprietor is that there are no built-in successors to step up to the plate if such an event should occur without a plan. This makes the importance of creating a business continuity plan in a sole proprietorship more prominent, and the negative impacts of not having one in place even more defined.

          A business continuity plan is a proactive measure to ensure that critical services are delivered to clients during a disruption. Disruptions can actually take many forms, including natural disasters, cyber attacks, accidents, and more. However, the most pertinent of disruptions within the financial services industry are ones which directly impact the business owner, since a majority of practices operate as a sole proprietorship.

          As stated, a business continuity plan includes measures to ensure the continuous delivery of services. That means it must identify the necessary resources (human, financial, etc.) to support continuity. In a business that has a single person providing those services, it must define an external party who would be responsible for providing those services in the event of a catastrophe. Therefore, this party must be certified and knowledgeable about the level of service to provide to the clients which would ensure as little disruption as possible. Another necessary aspect is the required funding to buy out the business owner’s ownership is in place . It’s important to note that it’s not just advised that there is a plan in place to minimize potential disruptions of service, it is both an obligation that the advisor has to their clients as well as the client’s right.

The Rundown on Succession Planning

          Where business continuity planning considers the bare minimum requirements for ensuring that your clients do not experience a disruption of service in the event of a disaster, succession planning goes the extra mile and ensures there is an experienced incomer for the key leadership roles in a business when a planned transition, rather than an unplanned occurrence, takes place.

          When a business takes the form of a sole proprietorship, succession planning by the owner will require that a qualified individual is brought into the practice and has the necessary knowledge and understanding of clients before the existing owner makes a transition, whether that be a partial retirement, full retirement or another situation. While succession planning is often seen as an act that signals the owner is looking towards an exit in the near future, it really doesn’t have to be that way. Strategic succession planning can easily mean growth for both parties and does not have to adhere to a short- or medium-term timeline. Instead, a long-term approach can be taken with a succession strategy in mind, which would benefit the senior business owner as well as the junior incumbent in many ways.

          Many advisors may raise their eyebrows at the statement that investing time into a succession plan could lead to business growth, rather than simply outline an exit strategy for an advisor looking to make an exit shortly. However, the time spent on putting together a good succession plan will lead to growth if done in a strategic manner. Your succession plan is a living document which will open doors to growth that you wouldn’t have known to knock on without it.

Main Differences Between Business Continuity and Succession Plans

          Now that you’ve gained a bit of clarity on what business continuity plans and succession plans are, here are a couple of the most important differences between the two. When it comes to differentiating between a business continuity plan and a succession plan in a sole proprietorship, things can get a little fuzzy because of how small the differences may seem. The following are the most significant differences between the two, from the perspective of an advisor who is a sole proprietor.

          As previously mentioned, a business continuity plan is put in place to maintain continuous service in the event of an incident that would affect the organization that provides those services. Since a sole proprietorship is the most common type of business within the financial services industry, death or disability of the business owner are the events most likely to cause such a disruption. A business continuity plan is established to prevent such an occurrence from impacting clients through maintaining a prescribed level of service in the event of a disaster. A succession plan, however, is a living document which is designed to identify and bring in a successor when the business owner decides they want to phase out of the practice, not when they are forced to due to circumstances out of their control. Essentially the main difference here is that where a business continuity plan is in place in the event of a catastrophe, a succession plan would focus on the incumbent working with the business owner over a period of time until the eventual retirement takes place, by choice rather than necessity.

          The next difference is that a business continuity plan is very specific in what aspects of a practice that it is concerned with. A business continuity plan is centred around preventing clients from experiencing a disruption of service, which could occur due to many different circumstances. This plan is utilized only if an event that would lead to a disruption of service occurs, and in no other situation. Further, the business continuity plan does not provide the opportunity for advisors to strategically incorporate growth, because of how specific it is, while a succession plan does. A succession plan should be treated as a living document and while it is mainly concerned with identifying successors for key players of an organization, there is a lot of room to use this plan to create growth opportunities. A succession plan should identify successors for the most important people within an organization, but it can involve agreements that bring business opportunities to the practice along with those successors. Since the succession plan is intended to be used while the business owner or senior organizational members are still part of the organization, it is a strategic endeavour rather than a contingency plan.

How Can These Plans Benefit Me?

          There are countless benefits to having both a business continuity and succession plan in place. While there is no contesting the amount of effort that you will have to expend in putting both of these plans in place, the value that you will get in return is truly priceless. As it has been expressed throughout history, if you have failed to plan, you’re planning to fail. Therefore, set yourself up for success by establishing these two plans sooner rather than later. The key benefits that these plans will bring to your business will be an important piece of understanding as you begin the planning process, and these benefits are outlined in this section.

          While it’s obvious that you must make sure your business is compliant and that you should mitigate your business against as many potential risks as possible, it might not be obvious that establishing a business continuity plan will increase your reputability with clients. A proper business continuity plan with an identified successor and financing in place shows both existing and potential clients that you take their needs seriously, and that you have a plan for them in case something happens to you. Building up the confidence that your customers have in you means that they are more likely to be loyal customers, and to recommend your business to others. The benefits of having a client base that will advocate for your services cannot be disputed. Showing your clients, through establishing a business continuity plan, that you put their needs first no matter what happens to you will cultivate the kind of advocacy that leads to referrals and subsequent growth.

          Succession planning offers much of the same benefits that a business continuity plan does, but it is more suited to have growth opportunities incorporated into the plan because of its wider scope. However, the most significant benefit that will resonate with a majority of advisors is the security it would provide for your family if you die unexpectedly or simply providing funding for your retirement. No one wants to imagine what their family would have to go through if they, as the provider for their family, pass away unexpectedly. Not only will this have severe emotional impacts, but without a succession plan in place, it would likely have negative financial implications as well. Minimize the trauma that your family would have to endure by properly planning while you can, and make sure all your ends are tied up in the event of a death or disability. While a business continuity plan will show to your clients that you are prepared to meet their needs in any event, a succession plan will ensure that your family and loved ones are taken care of financially.

          Considering the previously stated facts about the state of business continuity and succession planning within the industry, investing the time into creating these plans will actually give you a competitive advantage that we know only about 20% of other advisors also have. This is valuable information, that when coupled with the changing regulations within the industry, could serve to help revitalize your competitive edge while harnessing all the other benefits of both plans. The competitive advantage that business continuity and succession planning brings stems from the increased confidence that your clients will have in your practice and the likelihood to recommend you to others, but doesn’t stop there. These plans will allow your business to be in a comparatively better position than competitors in the event of a natural disaster, for example, or perhaps a new regulation that impacts the whole industry. Thinking of both business continuity and succession planning as a way to increase your practices’ competitiveness highlights the value of planning in the increasingly changing landscape advisors find themselves in.

Now Where Do I Start?

          Knowing the differences between and benefits of business continuity and succession planning is a great start to figuring out which plan is right for you and your practice at this point in time. In a sole proprietorship, it could seem as though there is overlap between the two plans. However as it has been stated, there is a difference in the scope that each plan covers, and the benefits that they will provide to you, your practice, and your loved ones once established. To have a good foundation for a transition plan, starting with a continuity plan is recommended. A continuity plan and partner do not necessarily cross over into transition, however could evolve into a transition plan and partner due to the fact that the prior sets a good foundation to work up from towards the latter. The continuity plan is really a “what if” plan, which could be executed during the development of a succession plan, therefore should be the starting point to those advisors who do not have any plan in place to speak of.

          With changing regulations, an increasingly competitive and changing landscape, and the reality of potential risks, developing both a business continuity and succession plan should be at the top of mind for those advisors who do not have them in place. If you are motivated to begin planning for either one of these, joining Find Bob can help you with the planning process, as well as finding a successor to work with.

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Support the legacy of both the family and the business

Create a future legacy for your family business

Continuity and succession planning are critical to achieving a long-term legacy and include things like defining when family members can work in the business, how profits are distributed, who serves on the board, and how to plan for next generation leadership.

If a key family member passes away unexpectedly or wants out of the business, the enterprise needs to remain stable as it goes through the transition. A strategic, well thought-out plan can help provide stability as the family business deals with the stress of change. PwC can work with you on continuity and succession planning to help ensure your family’s desired legacy.

No plans in place

Bringing up continuity and succession planning in the family can cause tensions to rise and some families avoid it just to keep the peace. In PwC’s 2019 US Family Business Survey, while 58% have succession plans, most of them are informal.

Continuity is critical because it supports the legacy of both the family and the business. It also has an impact on employees and community and is an important facet of supporting growth and longevity.

Not having a plan in place can put the family business, and family relationships, at risk.

....of US Family Businesses have a robust, documented and communicated succession plan in place. - US Family Business Survey

Balancing business, family and ownership

Family enterprises often have family members serving as owners of the business as well as managers. It is common for a family business to evolve from the founder making all business decisions independently, to bringing in more family members and establishing more structure as the business grows and becomes more successful.

PwC recognizes that family businesses struggle with a variety of challenges, including defining when family members can work in the business, determining how profits are distributed or reinvested and deciding who serves on the board.

Continuity planning involves creating a strategic plan that addresses these challenges, along with how ownership is transferred across generations. Families can reduce tension by defining such plans before the challenges have become acute.

How PwC can help

PwC’s Family Enterprises will work with your family to set up near and long term plans to ensure your family’s legacy. Our family business professionals can help you with:

  • Ownership and leadership
  • Testament and emergency plan
  • Next gen development and responsible ownership
  • Generational transition and knowledge transfer
  • Transfer of shares

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Business Succession Planning: A Step-by-Step Guide

business succession planning

Business succession planning is a valuable tool for both small businesses and growing enterprises. In small businesses, succession planning means effectively managing changes in ownership or leadership. In larger organizations, it that can help to avoid potential talent gaps that have a detrimental effect on the company. The right strategy can help you plan ahead so that you can transfer knowledge and retain employees in key roles. And this is a top priority in these uncertain, post-pandemic times.

With that in mind, we have created a step-by-step guide to help you design and implement a plan that sets your business up for long-term success . We will take a look at the benefits of succession planning in HR and break down the succession planning process to help you understand everything that’s involved.

What Is a Succession Plan?

Why is business succession planning important, what is succession planning in hr, the business succession planning process in 5 steps, business succession planning best practices, succession planning template, succession planning tools.

  • Create a succession plan with performance management software 🚀

So, what is the definition of succession planning? How can you apply it to your business?

Business succession planning is a process that helps you prepare your company for the future. Essentially, it’s about creating a strategy and process for identifying potential future leaders and developing their skills so that they are ready to take on a new role when one of your key employees leaves the company.

Through careful planning, communication, training, and feedback, you can create a successful change management strategy that prepares you for potential transitions in your business. This helps you avoid key player talent gaps. It also helps you proactively develop your inclusive leaders of the future.

Despite its valuable role in business planning, according to a survey conducted by SHRM last year, only 44% of HR professionals claim that their organization has a succession plan in place. What’s more, only 21% of those that do have a plan in place have created a formal succession management plan.

Do you have a detailed succession plan in place? If not, then you’ve come to the right place.

According to the 2021 Global Leadership Forecast , companies around the world are facing a leadership crisis. In fact, only 11% of surveyed organizations reported that they have a “strong” or “very strong” leadership bench, the lowest rating in the past 10 years (it has been in decline since 2011’s reported 18%). This drop has been attributed to a decline in leadership development and transition training in organizations.

Understandable given the distractions the world has had over the past couple of years.

Nonetheless, this figure shows just how important it is for organizations to work on their succession management strategies. This is the most effective way to ensure that the leaders of the future have the right skills and experience to guide them to success . And this is what business succession planning is all about.

By preparing strong leaders for the future, you can help your organization reach its long-term goals, reduce employee turnover , and build a stronger and more resilient business that’s ready to thrive.

Benefits of Business Succession Planning

In case you’re still not convinced, let’s take a look at some of the specific benefits of business succession planning in a bit more detail.

  • Identifying and developing your existing employees for future leadership roles helps you to promote from within . Aside from reducing turnover and hiring expenses , this also helps you ensure your future leaders have the right organizational knowledge and internal relationships , something which external recruits will lack.
  • Promoting the development of your existing employees shows them that you are willing to invest in their future . This can be a great morale boost that motivates employees to stay at your company. This helps you stay competitive and attract top talent to your business.
  • A well-designed succession plan helps you formalize training for both present and future leaders. It keeps your business moving forward and helps you retain your top performers .
  • Business succession planning is also an effective tool for mitigating the risks of organizational change . This helps you avoid any potential talent gaps when someone leaves your company. It also helps you pass on valuable institutional knowledge to future leaders before it’s too late.

Succession planning in HR consists is a vital part of talent management. It’s all about your role as an HR professional in identifying key roles and positions that may need filling in the future and finding and developing internal candidates who may have the right skills and experience to fill them. The right strategy can help you retain staff, cut recruitment costs and better manage your internal recruitment processes .

HR succession planning is the process of identifying, selecting and developing employees who could potentially become key players with the right development. This helps you prepare for potential organizational changes so that you have skilled and engaged employees waiting to fill key leadership roles when the time comes.

As an HR professional, you play a significant role in preparing and facilitating your organization’s succession management strategy. However, for your succession planning in HR strategy to succeed, it’s equally important to get the support of senior management so that your plan is as effective as possible and aligned with your organizational goals .

Talent Management and Succession Planning: Employee Buy-in

Business succession planning is also about managing your existing talent so that you are able to retain as much institutional knowledge and experience as possible. This means that, aside from working with senior management, you also need to rely on the feedback of your employees.

What do we mean by this?

Essentially, it’s all good and well managing and developing your existing talent, but they need to be on board with your succession plan and have a genuine interest in remaining at your company and developing their skills. Otherwise, the time and money you invest in preparing them for future leadership positions will be wasted.

Make sure the potential succession candidates you select are:

  • Interested in learning new skills
  • Comfortable with change
  • Motivated and engaged
  • Able to adapt to uncertainty and new working environments
  • Willing to take on more responsibilities
  • Up for a challenge

performance software

Now that we’ve discussed what business succession planning is, let’s take a look at what you need to include in your succession planning process.

Make sure your succession planning framework includes the following 5 key stages.

Define & Align Your Goals

The first step is creating a succession leadership plan. This means you need to define your goals and align them with your business. You may need to meet with senior leaders for this phase to ensure your goals are aligned with your overall strategy.

You also need to have a clear idea of who you are as a business before creating your succession leadership plan. Once you understand “who” you are, you will be better equipped to identify your potential new leaders.

Finally, to complete your plan, you need to:

  • Define the roles, skills, and experience that each successor will require (your succession profiles). Make sure you gather as much feedback on this as possible from your team to help you get a full picture of what you need to include in your succession plan.
  • Create a forecast of your company’s needs . Where do you need to be as a company within the next 5 years? How will your organizational structure change over this time? Think about your turnover trends, compensation strategies, who may be due to retire, and training and development plans for the future.
  • Update your job descriptions to reflect the information you’ve gathered. Make sure you are clear about your expectations . This will help you define the right candidate profiles for your succession plan.

kpi template for succession planning

Create Your Succession Strategy

Defining your goals is one part of your plan, but you also need to create a comprehensive succession planning strategy to make sure you are on the right track – you need a business strategy game plan !

So, what does this mean, exactly?

Put simply, you need to define a series of actions and strategic moves that help you align your succession goals and objectives with your overall HR strategy .

Consider the following:

  • Where do you want to be as a business? What roles, positions, skills and experience will you need to succeed?
  • Which senior/leadership roles do you need to create a succession plan for?
  • Will you take business succession planning into account during performance appraisals in order to identify potential candidates throughout the year?
  • Does your business have any specific vulnerabilities that may affect your succession plan? (For example, a high percentage of employees that are due to retire soon)
  • Have you considered adjusting your hiring strategy to account for successor roles?

The key here is to be as proactive as possible with your strategy. Anticipate potential gaps in your workforce before they occur.

Identify Potential Candidates

The next step is to evaluate your current workforce in order to identify key positions that may need filling in the future, and key employees that may be suitable replacements. This is where you will implement the succession profiles and job descriptions that you created in the previous step. The more information you include in your profiles and descriptions, the easier it will be to identify the right match within your existing workforce.

Generally speaking, the best candidates will be supportive, proactive, engaged with learning and development, great problem-solvers, adaptable and able to take on more responsibility.

It’s important to be as objective as possible in this stage. You also need to consider that potential candidates may not currently be in leadership roles. It’s all about finding potential. The most effective way to do this is by using succession planning tools and metrics, rather than relying on personal opinions. More on this shortly.

Establish Professional Development Opportunities

As soon as you have your list of potential candidates and you know what skills they need to work on in order to eventually fill the role you have matched them to, it’s time to create a professional development plan to help them get where they need to be.

Which skills does each candidate need to develop? What learning opportunities would help them get the right experience and expand their current skillset? Are there any knowledge gaps that you need to address?

Create a list of the skills each candidate currently has vs. the skills they need to acquire, then work out the best way to offer them suitable opportunities for learning and development. Create individual development plans, offer formal training, consider creating a mentoring or coaching program to support them, and encourage continuous feedback and communication.

Implement Your Plan

The final stage is implementing your business succession plan. This will usually be a gradual transition with multiple short and long-term layers.

The first layer involves officially announcing your succession plan and notifying potential candidates. You then need to roll out your individual development plans and arrange training. Introduce candidates to their mentors, if you are using them, and encourage them to meet regularly. This will show your employees that you support their professional development, and you can see that they have potential.

Most importantly, make sure you collect regular feedback to see how your individual development plans are progressing, and if potential candidates are on track to reach their succession objectives.

Here are a few business succession planning best practices to help you create a plan that sets you up for success:

  • Formalize your plan . The sooner you create and formalize a detailed succession management plan, the better. Make sure your succession planning process focuses on all key stages. That means not just identifying the roles and skills you need for your future leaders, but also implementing individual development plans to get your workforce where they need to be.
  • Make sure your succession planning in HR plan is dynamic . Succession planning is all about change management. Be prepared to adapt to change by constantly updating your plan.
  • Collect regular 360-degree feedback . This will help you keep track of your employees’ interests, skills, performance, strengths, weaknesses, and opportunities.
  • Promote open communication . This will help you build trust and set clear expectations.
  • Consider your entire workforce . Don’t just focus on your managers. Your leaders of the future might be hiding in lower-level positions. Look for potential, not existing skills.

One of the most valuable tools you can use for this strategy is a succession planning template. The right template will help you define key roles within your company and identify suitable replacements. Make sure you include a template in your HR audit checklist (check out this HR audit checklist template if you don’t already have one!)

Here are a few examples of the information you can collect with a succession plan template:

  • Current key employees and potential replacements
  • Key skills and experience that each position requires
  • Candidate training and/or experience level
  • The time it would take to onboard a candidate for an existing position
  • An overview of upcoming vacancies (for example, key employees that are due to retire)

hr audit checklist

In order to create and manage an effective business succession planning strategy, you need to use the right succession planning tools. These are the tools that will help you identify which candidates could potentially be future leaders at your organization. They also help you identify potential succession gaps and map the right candidates to the right positions.

Ideally, you should be using a range of tools to help you get a full picture. Here are a few examples of succession planning assessment tools that will help you with this:

  • Personality assessment tools : to help you get a comprehensive picture of your existing culture (e.g. tools for tracking motivation levels)
  • Behavioral assessment tools : to help you identify and analyze employee leadership skills and assess how they behave at work (e.g. situational judgment tests)
  • Cognitive assessment tools : to evaluate critical thinking and reasoning skills related to performance (e.g. a cognitive aptitude test)
  • 360-degree feedback : to gather valuable input from employees and their peers in order to understand their readiness to take on future roles (included in most performance management software solutions)

Succession Planning Software

Finally, once you have designed and implemented your business succession plan, you need to regularly monitor progress. This will help you determine if your plan is working and if potential candidates are on track to reach their succession goals.

And this is where succession planning software can help.

Succession planning software isn’t as daunting as it sounds. In fact, most HRIS systems can provide you with the data you need.

The first thing you need is access to key metrics and KPIs . This includes turnover rates, retention rates, cost-per-hire, time-per-hire, and the rate of planned positions being filled. You also need to evaluate performance metrics to determine if business succession planning candidates that have taken on their new role were ready for it.

Did they achieve the training and experience they needed during the development phase in order to take on their new leadership role? If not, what could you have done better?

By analyzing the right data, you can determine what areas of your business succession planning strategy you need to work on in order to continuously improve the quality of your succession candidates. And by using the right HR software and performance management software you can easily identify talent gaps, make comparisons between employees, and simplify the succession management process.

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1 in 10 Leaders Say Succession Planning Is Not Worth the Time and Money It Costs — Here's Why They're Wrong. While seemingly straightforward, succession planning for business owners can take several different forms, each with its own set of pros and cons. You need to understand your options when you inevitably sell or pass down your business someday.

By Larry Guess • Sep 22, 2023

Key Takeaways

  • 1. Carve out the time necessary to make a succession plan.
  • 2. Make sense of a sale prior to the sale.
  • 3. Learn to balance business continuity and succession planning.
  • 4. Arrive at a smart fiscal decision.
  • 5. Put the pieces together to get a fair market value of your business.

Opinions expressed by Entrepreneur contributors are their own.

Business owners know a thing or two about working long hours. Without fail, there's always something to do. But what about putting in the time to develop proper business succession planning? A recent report from SIGMA shows that nearly 1 in 10 leaders believe succession planning is not worth the time and money that it costs. Are you that one? There will be a time when you'll want to transition ownership of the business to another party, and it may be sooner than you think.

While seemingly straightforward, succession planning for business owners can take several different forms, each with its own set of pros and cons. You'll want to understand your options and how they relate to what you hope to accomplish. No matter when or how you transition ownership, your results will be impacted by how much effort you put into planning.

Related: Succession Planning: It's Never Too Early to Start Thinking About the Future of Your Business

Starting with the end in mind

An important trait in highly effective people is the ability to come into any given situation with a clear understanding of the destination. It allows for better identification of the necessary steps to achieve a desired outcome. That's business succession planning in a nutshell — or, at least, that's the goal.

If you think success planning is as simple as handing over the reins to family, you'd be mistaken. Only about half of heirs want to take ownership of the family business. That's a stark difference from what business owners actually think, with 67% believing that their heirs want the business. Even if the family member is ready to take over, succession planning for business owners takes time and preparation. Below are five strategies that will help you start planning for succession and the thought that needs to go into it.

1. Carving out the time necessary

In our experience, it's best to start creating a succession planning roadmap at least three to five years prior to the date of the planned transition . Without a roadmap, you might unknowingly create hurdles to a successful transition instead of facilitating a clear path to new ownership. In fact, it could even put into question the financial security you desire.

Let's say you'll be selling the business to an unrelated third party. The financial impact will be significantly different than "gifting" the business during your lifetime or transitioning ownership upon your death by way of an estate plan . You must determine the value needed from the sale to maintain your lifestyle once you no longer own the business — and that's just the start.

Related: Most Family Businesses Don't Have a Succession Plan in Place, But That's a Huge Mistake

2. Making sense of a sale prior to the sale

Selling to an unrelated third party can present several challenges. Identifying potential buyers that are qualified to purchase the business isn't always easy nor is taking all the appropriate steps to prepare the business for a sale. A great deal of information will be required as part of the buyer's due diligence process. How long will the process take from start to finish?

Then, there's the question of whether to engage a business broker or investment banker to assist in the sale. How will they evaluate potential offers? What potential issues might come up in the purchase agreement? Are there any confidentiality concerns? Is the sales process being done in the most tax-efficient manner? Have you considered what you'll do after the sale?

3. Balancing business continuity and succession planning

We recently worked with an owner who had several separate yet related businesses. They only wanted to sell one of them. The process started with a full valuation and then the determination of whether selling one business would be detrimental to the value of the combined businesses. They also wanted to explore whether they could sell the business to a group of employees and how that might compare to an outright sale.

We conducted an assessment to identify the business owner's goals in the ownership transition. Then, we helped them prioritize those goals. After talking with several interested buyers, including the employees, the owner decided to move forward with a large buyer who expressed interest in acquiring the business and real estate.

4. Arriving at a smart fiscal decision

The owner's choice of buyer came down to the fact that it would enable them to achieve the majority of their highest-priority goals. Because of advanced planning, the owner knew what their business was worth , the minimum value they'd need to receive from the sale and the potential issues the buyer would likely raise.

Ultimately, the buyer did make an offer that was lower than the valuation, but we were able to negotiate a more acceptable offer that provided for full payment at closing. This provided the certainty that the owner sought, and the transaction was closed within a reasonable amount of time. All parties were pleased with the outcome.

First Business Bank recommends you employ a team of professionals to help you come up with a proper valuation for your business — including "your CPA and business appraiser. You might also include your attorney, wealth management professional, business banker and possibly an investment banker/business broker in the discussion to ensure coordination."

5. Putting the pieces together

Creating a succession plan for your business always starts with defining the goals you'd like to accomplish as part of the ownership transition. It's for this reason, among many others, that we recommend getting the ball rolling as early as possible. Once you've defined your goals, you can focus on arriving at a fair market value for your business today.

With that in mind, how much value would you need to realize to be financially independent after the transition? Will the sale allow you to live your desired lifestyle? If there's a gap between the fair market value and what you need to achieve your future income needs, then develop a plan to increase the value of your business within the timeframe you'd like for the transition.

Related: 4 Lessons on Succession Planning for Entrepreneurs

Getting what it's worth

We firmly believe that the more time and effort you spend on business succession planning can exponentially improve the probability of a satisfactory outcome. The more you prepare and understand what to expect, the smoother the process will go for both you and the buyer. It also doesn't hurt to have an advisor on hand who can properly assist you through the process.

Ultimately, preparation is key to successful succession planning for business owners. It will save you time and could even help in building trust with the buyer, which can minimize conflict as the process moves forward. When the buyer has confidence in the information they're receiving and your integrity, it provides you with more leverage in negotiating the final price and terms.

In the end, a succession planning roadmap increases the chances that you'll get what the business is worth and be able to maintain your lifestyle for years to come. It's all in your approach.

Entrepreneur Leadership Network® Contributor

Director of business succession planning at Plancorp

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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Business succession plan vs. business continuity plan.

succession planning and business continuity

Last month, we wrote about Business Succession Planning and the role that an attorney plays in it. One of the questions we received from the article asked about the difference between a Business Succession Plan and a Business Continuity Plan. Do they achieve the same thing? Is one easier to create than the other? How concerned should a business owner be about having either? To help answer those questions, let’s first explain how both processes work.

Business Succession Planning is the process of preparing for an eventual change in leadership roles at your company. Creating a Business Succession Plan means acknowledging that your business has a future beyond you leading it, and beginning to look at what that future might be. While creating a Business Succession Plan sometimes means that you are looking to exit your company in the near future, it can often be planning for years ahead. In fact, creating a Business Succession Plan and teeing someone up to replace you in the primary leadership role at your company can often lead to a period of growth and prosperity for everyone involved.

Business Continuity Planning

Business Continuity Planning is the process of ensuring that your clients will receive their regular standard of service no matter what happens to challenge your regular processes. Business Continuity Plans have been around for a long time, but have been of particular interest following the COVID-19 pandemic (as I’m sure you can imagine.) A Business Continuity Plan seeks to address how your clients will still receive your regular service in the wake of everything from natural disasters to your death. Business Continuity Planning is an attempt to expect the unexpected and ensure your business is prepared for anything.

Which is Right For My Business?

As you can see, Business Succession Planning and Business Continuity Planning serve entirely separate purposes. Business Succession Planning prepares for a planned change in your company, while Business Continuity Planning prepares for unplanned disruptions that might make your business difficult to accomplish. Business owners who are serious about the future of their company should make sure they undertake both processes. They complement each other rather than conflict. Best of all, you can rest a little easier knowing that your business has a plan for the future.

How Do I Get Started?

For help creating a Business Succession Plan, a Business Continuity Plan, or both, contact Bryant Taylor Law today! We help build and protect Florida businesses, every step of the way.

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What is Succession Planning? How to Ensure a Seamless Business Transition

Aaron Juckett, CPA, CPC, QPA, QKA

For many business leaders, ownership is the adventure of a lifetime. You establish, build, and grow a thriving company. You navigate early entrepreneurial roadblocks, celebrate major company milestones, and deliver valuable products or services to countless customers.

On the inside, you’ve hired smart, value-driven employees who care deeply about succeeding as a team. You’ve developed innovative products or services, and standardized processes as you scaled and grew a company. You’ve identified employees’ strengths and weaknesses, created growth opportunities for them, and helped them become a strong and successful team.

And that’s why succession planning is so important. It paves the way for a smoother future for the organization as a whole — with or without you. 

Even if you have no foreseeable plan to change ownership or retire, leadership transition planning is an essential element of strategic business planning. It helps retain employees by making their career paths clear, and it can serve to protect valuable institutional knowledge that would otherwise be lost when senior team members depart.

At the same time, an intentionally crafted and executed succession plan complements a leader’s exit strategy. It’s likely that sometime you will want to — or need to — leave your work behind. But you care about your business and your employees, and you want their success to continue.

And that’s why the best time to start succession planning is well in advance of even thinking about your exit.

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Explore All Your Business Exit Strategy Options

When retirement is on the horizon, business owners need a plan. Discover your options.

What is Succession Planning?

Succession planning is a proactive, strategic approach to ensuring leadership continuity. Having a succession plan enables the business to prepare for the inevitable changes ahead, rather than having to react to vacancies as they arise. It focuses on identifying and preparing internal candidates to more smoothly transition into leadership and key roles.

High-potential employees are identified and groomed through training and mentorship, and gradually introduced to the challenges of leadership. Succession planning cultivates capable successors who can carry forward the company’s vision.

Not every role in every company needs a succession plan; it’s typically reserved for leaders. But positions that require hard-to-find or proprietary skills are also smart candidates. Succession planning is a growth process, for the company as well as employees. As team members grow the skills, experiences, certifications, and other requirements to step into their next roles, your business also grows increasingly resilient.

Every succession planning process is as unique as the company following it, but generally, it’s stepped out something like this, with employee communication an important part of each step:

  • Evaluate your organizational chart to highlight vulnerabilities and key roles.
  • Define the knowledge, skills, and responsibilities that will belong to the successor.
  • Identify internal candidates for development (where needed, consider external candidates).
  • Create individualized development plans for successors that include training, mentoring, shadowing, and incremental progress.
  • Establish transition timelines for handing off responsibilities.
  • Implement and monitor development and knowledge transfer plans.
  • Execute role transitions and continue building the talent pipeline.

The objectives are straightforward: business continuity, smooth role transfers, preservation and sharing of institutional knowledge, and employee retention. Ideally, succession planning ensures that when a key employee departs, a designated successor is prepared to take over the role without disrupting the work.

And it’s not solely about preparing succession candidates ; it's just as much about strengthening the organization. It allows for transition periods of adjustment during which the outgoing leader or employee can smoothly hand over knowledge, experience, and insights, as well as facilitate key relationships that support success in the role.

A transparent, well-communicated succession plan can also be an effective employee engagement tool. Teammates often appreciate open dialogue about future plans; it provides a sense of security and direction, knowing that the company proactively prepares for change and has a vision for its future. It also motivates ambitious teammates with a clear career path within the organization.

In short, succession planning is more than a process. It’s a strategic investment in your company’s future.

What It’s Not: Succession Planning vs. Exit Planning

Succession planning and exit planning, although interconnected, differ significantly in their scope and objectives. They operate like two sides of the same coin, each playing a vital role in ensuring a smooth transition in the company's leadership and ownership . 

Where succession planning is concerned with finding and preparing key teammates, exit planning is about the owner’s strategy to transition out of the company. It’s much more personally focused.

RELATED: Business Transitions: Sell or Keep Your C Corp as a Retiring Business Owner?

Your exit strategy examines a plan for creating a liquidity event, and all the details surrounding your departure, such as retirement, financial, and tax planning; and whether, when, and how you’ll remain involved after the business sale transaction is complete. Exit planning is about orchestrating an orderly, profitable exit that aligns with your personal, professional, and financial goals.

Both strategies should work in harmony to ensure a seamless transition. Together, they offer a balanced approach to leadership transition — maintaining company stability while also meeting the outgoing owner’s needs and aspirations.

Why is Succession Planning Important?

Some of the benefits of succession planning are immediate and obvious, but the long-term risk-management benefits can also contribute to a company’s future strategic growth plans. Consider these advantages:

  • Business continuity — ensuring qualified people are ready to cover key roles whenever needed
  • Knowledge capture and sharing — preventing the loss of institutional knowledge when key employees depart
  • Contingency planning — when the unexpected arises and a role needs to be filled fast, the company isn’t starting from scratch
  • Employee engagement — demonstrating the company’s commitment to cultivating leaders
  • Lower hiring costs — nurturing employee growth means you maintain a ready bench for important hires (plus shorter and less costly onboarding and training)
  • Stakeholder trust — investors, customers, vendor partners, lenders, and even the community your company calls home can all feel confident knowing your business is ready for whatever lies ahead

Implementing thoughtful succession planning demonstrates your commitment to your company’s future, and the company’s commitment to loyal, high quality employees. It helps sustain a smooth business evolution even as leadership changes. 

Pairing a thoughtful succession plan with a clear exit strategy makes it easier to embark on your next adventure with the confidence that your business vision and values are in the best possible hands.

Your exit strategy is likely to have an impact on your approach to succession planning. Explore all your options, starting with our free exit strategy guide . Click below to get yours today.

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United States: COVID-19

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Keep up to date with Akin Gump Strauss Hauer & Feld's COVID-19 Resource Centre

The COVID-19 outbreak has shown the importance of having a business continuity plan and succession plan in place that accounts for emergency and disaster events. If companies do not already have one in place, now is the time to do so.

In adopting a business continuity plan, companies should identify essential and non-essential business operations. They should consider whether a centralized system is in place that allows for fluid transfer of information and communication among its management and employees, as well as access to and retention of documents. As more cities and states have implemented a shelter-in-place policy and limitations on non-essential travel as a result of the COVID-19 outbreak, business continuity plans should also account for any technological infrastructure that may be required to handle a significant increase in employees working remotely and related cybersecurity risks . Moreover, business continuity plans will need to reflect the impact of the practices of vendors and suppliers on a company’s business interruptions during events, such as the COVID-19 outbreak.

The COVID-19 pandemic has shown us further that the CEO and key officers are not immune, and companies should adopt a succession plan that accounts for unforeseen emergencies. Succession and contingency plans should include identification of successors, interim personnel and/or shared duties and responsibilities among existing personnel in the event that certain personnel become unavailable to ensure continuity in the management and daily operations of the company.

Lastly, as additional challenges from the COVID-19 outbreak emerge, cooperation among management and the board of directors has proven crucial in developing business continuity and succession plans that are reassessed and adjusted as often as necessary.

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succession planning and business continuity

Your Business Needs a Succession Plan: Here Are the Basics

Succession planning may be the single-most neglected aspect of business ownership. Don’t make the same mistake that so many others do. Instead, get started with your plans today.

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A man stands alone in a boardroom

In Part 1 and Part 2 of this series on selling your business, we’ve examined the questions facing owners who entered 2020 ready to make their move, breaking down how the COVID-19 pandemic changes the situation and how to increase a business’s value if you decide to delay bringing it to market. There’s another way forward, though — standing pat and not selling.

Tax Wrinkles for Work-at-Home Employees During COVID-19

If you were a business owner who was considering putting your company on the market but decided not to sell (or at least not anytime soon), what steps should be you taking now? The goals are to ensure preservation of the current business, as well as provide for an orderly and stable future transition when the proper time to sell arrives. Accordingly, the first and most critical step is setting a goal to implement both a business continuity plan and a business succession plan. The sooner, the better.

We have all learned a valuable lesson from the COVID-19 pandemic: A significant business disruption can happen with very little advance notice, and not being prepared can be disastrous.

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Developing a Business Continuity Plan

Armed now with the knowledge of how the pandemic impacted your own business operations, you can now plan. Did the travel restrictions impair your sales efforts? Did the substantial increase in employees working remotely overburden your IT infrastructure? Did your vendors and suppliers make requests that you couldn’t respond to effectively?

The goal of a business continuity plan is to identify that which is essential and that which is not and to place the business in a position where it can continue to operate during a disruption. Ideally, the business continuity plan would include:

  • A comprehensive strategy for keeping the business operating day-to-day.
  • An assessment of essential and non-essential operations and processes.
  • An analysis of key employees/positions and how each would be impacted by a disruption and, specifically, the potential loss or unavailability of key employees.
  • A review of facilities and analysis of how the business operates if one or more location becomes unavailable.
  • A plan to protect, secure, back up and replicate, if necessary, critical data systems, infrastructure and applications.

These are only a few of the many issues for consideration when developing a business continuity plan. Many of the details are industry-specific, and you need to work with your key employees and advisers to address the challenges likely to face your particular industry. Consider meeting and discussing with your vendors, customers and suppliers the challenges that were presented by the COVID-19 restrictions. Get their views on how things could have been handled more effectively. Information is key to developing a plan that will actually work.

There’s Never Been a Better Time for Business Owners to Make a Move

Once you develop a plan, revisit it regularly and adjust and update it so that it is always ready to go when you need it. If, for example, your CFO retires, you will need to consider how the loss of that person and their particular knowledge will affect the plan. Will their successor have the wealth of historical knowledge necessary to obtain and transfer information in a timely manner? If not, consider how you address the gap. Every organization seems to have those “go-to” people who have been there forever and without whom things run much less smoothly. Consider how the plan is impacted if those individuals are unavailable. The key takeaway is that the plan needs to grow and change with the business in order to work effectively when the disruption happens.

Developing a Business Succession Plan

No matter what your plans are for the future of the business, eventually, you will transition it to someone. Perhaps that someone is a purchaser, or perhaps you will transition to your family, key employees or some combination of the two groups. The point is that transition will eventually be unavoidable. Ideally, you get to control and be part of the process. That, however, is not always the case. Unexpected death of an owner, key executive or employee can cripple a business if no successor has been identified and there is no plan for transitioning management.

Every business succession plan looks different. Not every business owner wants to transition their business in the same way or at the same time. Some owners want to exit completely at a certain date. Others want to stay involved to a lesser degree over time but never exit entirely. These issues, as well as many others, must be considered. The plan should be designed to:

  • Address anticipated timing.
  • Identify one or more successor.
  • Address the value of the business.
  • Provide for implementation of the plan.
  • Discuss communication with employees, customers and family.
  • Include tax planning.
  • Provide for contingencies.

In my long career as a business lawyer, I have observed that succession planning is the single-most neglected aspect of business ownership. Maybe it’s human nature to think that we’ll always have time to deal with it later. The truth is, if you don’t get around to it and the unexpected occurs, the impact on your family and employees could be devastating. Also, we see many executive job candidates asking about a company’s transition planning before they are ready to commit to working there. Lack of a transition plan can therefore have a negative impact on attracting and retaining talented employees and executives.

The best way to approach the process, in my experience, is by dedicating a year to the effort. Spend three or four months discussing the process with your family, executive employees, your bank and other key stakeholders. Get your lawyer and accountant or other tax adviser involved from the outset. Develop and refine the plan over the next few months, and implement it over the last three or four months. One year is what you need. Negotiate the fees with your professional advisers in advance and get a budget for each phase. When it’s done, you’ll thank yourself, and your business will be better off for having gone through the process.

Final thoughts

As touched on in this article and the other parts of this series, the COVID-19 pandemic was and remains a major disruption that couldn’t have been foreseen by most business owners at the start of 2020. The confusion of the early days, however, is beginning to clear. For owners who were planning for a transition, there is path forward — be it bringing the business to a changed market, delaying the decision or staying put for a time.

No matter the decision, proper preparation and organization will make it easier.

Help! I Can’t Afford to Sell My Business

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA .

Patricia Farrell is a corporate law attorney in Pittsburgh. With a primary practice in business services, she regularly represents privately held businesses in mergers, acquisitions, divestitures and other major transactions, both in the United States and in Europe, Asia and Australia. She also has a broad corporate practice where she assists with corporate governance as well as succession planning for business owners and a variety of other day-to-day business issues.

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succession planning and business continuity

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Succession planning: A key to business continuity

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Departures don’t have to equal disruptions

Employee departures are inevitable. Team members across every department, and even those in leadership positions, will come and go. Workforces are no longer as static as they once were, and labor fluidity has only increased in the wake of the pandemic. To minimize the disruptions these departures may bring, businesses must take succession planning seriously.

Every team in an organization has employees that are crucial to the business’s overall operational health. When changeovers happen in the absence of carefully designed succession plans, businesses too easily lose critical knowledge and skills. Departures – especially from the leadership ranks – may also be quite unexpected, which can lead to stressful, chaotic attempts to quickly patch holes in a team. What can organizations do to manage the unexpected?

Succession planning holds these volatile disruptions at bay and mitigates the risks departures can bring by creating a pre-emptive blueprint – a layout teams can use to proceed when key members leave.

But avoiding risk isn’t the end of this story. When a company makes a succession plan, it shows employees that it is willing to invest in and prepare for their future. This boosts morale and, by extension, employee investment, engagement and retention rates.

So, the benefits of succession planning are numerous and obvious. But what steps should a business take to draw up a blueprint that will successfully carry it into an unpredictable future?

Let’s focus on four critical steps to succession planning that will help organizations minimize harmful disruptions and make employee departures and transitions smooth.

succession planning and business continuity

Preparation

  • Bring the team onboard

Writing for Business.com , Sean Peek makes a crucial statement: ‘A business is only as successful as its employees’. Employees are a company’s hands, feet and voice, carrying out its mission and representing it to customers. At the outset of succession planning, it’s important to bring all relevant team members into the process. Though initial conversations may feel slightly uncomfortable or awkward (as discussions of the future often are), they should still be approached with candor. Think beyond resignation and account for other circumstances that could create vacancies, such as retirement, personal emergencies, sabbaticals, or even death. If applicable, also draft a buy/sell plan in case the company merges with or is sold to another organization.

Above all, ask team members about their goals and aspirations for their careers/positions and use these conversations as a time to identify which employees are best equipped to step into the holes created by departures. In general, succession candidates should:

  • Have, or be interested in developing, the skills necessary to fill the new role.
  • Be motivated and willing to take on new responsibilities and challenges.
  • Be adaptable to new environments and able to work well with different people/personalities. (This is important for all employees, but it is especially important for candidates stepping into leadership positions).

But don’t do all of this behind the scenes. Don’t keep an employee’s status as a succession candidate a secret from them. Let them know and talk to them about the opportunity. Some may jump at the chance. Others may not. It will be best for everyone involved if this information is out in the open long before the succession plan needs to be implemented. If a business owner would like to consider candidates beyond current employees, a reputable recruitment firm may be enlisted to identify potential successors.

  • Update systems and processes

To do their work effectively, employees need solid business practices and a well-equipped working space in which to carry them out. During the preparation procedures, closely evaluate business processes and make any needed changes. Document procedures so that incoming successors and all employees will have a game plan for moving operations forward. Fix or replace aging equipment and simplify or automate processes that seem unnecessarily complex. For in-office employees, consider expanding or rearranging the workplace to give them a better environment in which to work, and make similar changes for remote employees by revisiting and upgrading their tech setups. Consider purchasing a modern ERP system to easily connect remote, field and office workers to each other and to real-time company data.

  • Know the business

Succession planning should not be approached haphazardly. In fact, such an approach can damage a business in ways that are difficult to recover from. To design a sturdy, reliable succession plan, decision-makers must truly know their business inside and out. Of course, they already have a vision of the business in their minds, but gaining a clear picture of the overall reality and projecting that reality into the future is a deep, methodical process that should involve:

  • Studying and possibly revising the business’s larger goals.
  • Considering what roles, positions and skills teams will need to compete and succeed in the future.
  • Assessing vulnerabilities that could become full-fledged stumbling blocks when departures occur.
  • Shifting succession planning mindsets to prioritize those vulnerabilities.

Overall, a succession plan must fit a business’s actual needs. For it to do so, the people designing the plan must know what those needs are. If they don’t put effort into gathering that knowledge ahead of time, and if they make decisions based on incomplete knowledge, the succession plan may fail.

Choose successors

When a succession plan has been created and buy-in has been secured from employees and succession candidates, it’s time to actually choose the successors. If the business is family-owned, successors may be younger family members, who were brought into the organization early and have been mentored and trained to step into the roles for most of their lives. But, sometimes, these younger family members may not want to take on roles in the business, or they may not feel ready to do so. In that case, family-owned companies should do what other organizations would:

  • Promote current employees to the roles and source new hires to fill the vacancies left by the promotions.
  • Hire experienced succession candidates identified by the current owner or HR/management teams—or by a reputable recruitment firm.

If the person stepping away is the business owner, they may also choose to transfer control of the organization to employees rather than picking a single successor.

Formalise and implement training programs

For its succession plan to work, a business must set its future leaders, managers and new hires up for success. But generic training programs don’t necessarily communicate the depth of specialized knowledge succession candidates need. So, to fill this gap, businesses should take time to:

  • Note employees’ areas of strength and areas needing improvement.
  • Prepare for a wide range of future leadership candidates, each with different skill sets.
  • Keep the succession plan in mind when choosing new hires.

Taking these steps will help decision-makers design professional development courses or mentorship models that are fine-tuned to their organization’s specific needs. This can include:

  • Creating dashboards and reports that will help successors understand and manage their new requirements.
  • Training them in using the business’s systems and equipment.
  • Discussing policies, procedures and organizational changes with them.
  • Monitoring their progress, offering constructive feedback and taking corrective action if needed.
  • Publicly praising the successors’ accomplishments.

Modern business management technology (like Acumatica’s cloud-based ERP solution) can play a key role in this process by keeping human resources, employee and training data gathered in one place. That way, information is always easily accessible to decision-makers and, ultimately, to successors.

If a succession plan is effectively designed and appropriately carried out, it will enable employees to leave their positions with the confidence that the company is poised for success. Business owners who are retiring should maintain relationships with their successors, so the successors can continue to draw on the owners’ knowledge and experience as needed.

And remember, a succession plan takes time – particularly succession plans for executives and business owners. Set target dates and complete the preparation, selection and transition steps well ahead of time. For executives and business owners, this will need to be done over several years prior to the set exit date.

succession planning and business continuity

Ensuring business continuity with successful succession

‘Change’ is the name of the game, and businesses certainly aren’t immune. But just because ‘change’ can be ‘different’, it doesn’t necessarily follow that ‘different’ is always ‘disruptive’.

Business continuity despite critical departures is achievable if succession planning is approached with careful thought. By cultivating employee buy-in, formalizing fine-tuned training programs and developing in-depth knowledge of every facet of the business, decision-makers can craft succession plans that will carry their organizations into a successful future.

Succession planning is a key to business continuity. And the key to succession planning is making arrangements early and making them well.

Some free resources to make the job easier

To help, Acumatica has developed free resources designed to make the job easier.

The Succession Planning Playbook offers a deep, step-by-step discussion of the succession planning process organizations should follow to achieve business continuity and longevity.

For a succinct review of the critical nature of succession planning, the four steps to formulating the right plan and how using modern ERP applications can improve succession planning, read the Solution Brief .

The infographics included in this article were derived from Effective Succession Planning , which gives a more in-depth look at the research behind the numbers.

Acumatica representatives can be contacted here, or schedule a customized demo .

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Business continuity and succession planning

Glenn O’Grady highlights why succession planning and business continuity go hand in hand when it comes to navigating external pressures

How do you build a business that’s able to withstand external pressures such as a pandemic? Most of the advice I have seen has focused on the importance of businesses being agile so that they can adapt to the extenuating circumstances they currently face, but one key factor in insulating yourself from the unforeseen is by building a great team that can take your business to the next level.

When I started GuideSmiths in 2014, I had no idea what a chairman of a business was, let alone how to get there. When we became a business of scale four years later I realised that I was at the centre of way too much and my daily to-do lists went from enjoyable to incredibly stressful in a matter of months.

This is very common for founders (more so in services) where they are completely embedded in the business and not working on the business. If I could go back and tap myself on the shoulder earlier I would have built a succession plan into my strategy from the very beginning.

But where do you start? Everyone is different, so the order of the recipe may change but the ingredients are always very similar. My starting point would have two points on the agenda, ambition and clarity .

When starting up a business, most will have a set of goals driving them towards some form of target, and it is vital that you understand and share the ambitions of the key people in your business.

I came to this realisation when I wanted to move to a new house. To make the move a reality, I needed money; inevitably, this money had to come from my business. I have a great business partner, but he didn’t know this and I couldn’t just go and raid the profit pot to satisfy my personal ambition. So, we sat down and translated each of our ambitions into a ‘personal goals’ roadmap over two years. Not only was it a great exercise, but the personal transparency also brought us closer together. We then spoke to our senior team members and ascertained their personal ambitions, where they see their future and what was required to get there. Not only did the exercise demonstrate that the business cared about our employees, it also helped us determine who showed leadership intent.

We took all this information and translated it into our strategic roadmap for the business. Why? My goal can’t be to extract cash in dividends to relocate, while my partner has other priorities like recruitment in mind. If your goals do not align, it creates friction, which can seriously jeopardise the success of your business.

Aligned in our ambitions, we then created a business roadmap. One of the key elements was to step back out of leadership and grow the senior team into it. We would never have done this if we did not have total clarity on where we wanted to get, which brings me to the next steps: strategy and planning.

Once we had clarity and our roadmaps in place, we started to really fine-tune our strategy. We are an agile software development consultancy, so five-year plans are a little alien to us. Instead, we chose to set very clear targets and create a one-year business plan that was co-created by ourselves and our senior leaders. We bought in a third party to deliver it in workshop form and help drive us to a collective output. In parallel, my partner and I were starting to manoeuvre the senior team into the leadership positions most aligned to their stated ambitions and skill sets.

This is a really key point: I didn’t just create a strategy for the team to adhere to, our senior team were assigned their parts of the business, such as sales or finance, and I just glued it all together with my deep knowledge of the business. At this point, I knew we had a team that was brought into a strategy they created, and we had a leadership team we knew could take the business forward without us. Part of the strategy was to clearly lay down to our team that our plan to step back was accelerating.

(At this point and as an aside, it’s important to take some time to understand what sort of business you are so that you can look for suitable candidates with character traits that match your motivations.)

Every business has a similar set of processes cutting across it. We broke these processes down and really had to focus on our individual roles and start to break the functions away from us step by step.

We spent time with the Leadership team being very clear in defining their roles and worked out the verticals where we needed to create a succession plan or recruit. It was important to remove ego from this step in the journey; this was ‘what was best for the business’ and not for the individuals concerned. My business partner and I stayed in tactical roles until we knew functions were fully handed over to the team and they were comfortable running things without us. Of course, we were only a Slack message or phone call away. The succession plan involved a breakdown of each of the roles and allocating time and budget to provide training plans and support where we felt between us there were areas for growth and improvement into the role.

Once this has all been achieved, you then need to execute your plan and know it’s working with metrics.

Board metrics 

All founders have an innate sense of what’s going on in their business, but this isn’t much use if you’re trying to hand over to a senior team. You need clearly defined metrics at the board (or whatever reporting ceremony you have) level to understand if the business is performing against targets. We have put in place a comprehensive set of metrics and the Leadership team presents these to us monthly in a report and meeting. We can see with absolute clarity what is in our pipeline, our costs and financial performance, any people issues and so on…. I spend about an hour scanning through the report in advance of the meeting and instinctively know when something is not trending well. Without these measures, it will be a struggle to execute a succession plan at all.

Everything in your business is interconnected, therefore you cannot make changes like this without filtering in the costs to your budget, revising targets, possibly recruiting, paying for training, backfilling of roles or tasks for people stepping into new positions. You really have to build it into your strategy and budget at the macro level downwards. It’s a great thing to do and I’ve really enjoyed handing over the responsibility and putting a divide between myself and the day-to-day business activities. I’d spoken to several chairs who’d stepped back and absolutely none have regretted it, I just wish we’d done it sooner.

succession planning and business continuity

Glenn O’Grady is co-founder of GuideSmiths , a software consultancy expert in Node.js, microservices, greenfield development, DevOps, digital transformations, and legacy migrations.

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The Key to Successful Succession Planning for Family Businesses

  • James Vardaman

succession planning and business continuity

Don’t exclude non-family members from the discussion.

Successfully passing the baton to the next generation is a goal for many family business leaders. It can also be a sound business move if the right steps are taken. By clearly communicating family succession intentions, developing strong relational bonds, and proving the fitness of next generation leaders, family firms can achieve buy-in from their nonfamily employees. Not only will this make for a smooth leadership transition, but it can also increase nonfamily identification with both the family and the firm, creating a more productive and satisfied workforce that propels the firm for years to come.

The succession process is one of the biggest challenges facing family firms, as most fail to remain a family business past the second generation. Among those that do succeed, a key concern is how nonfamily personnel will receive a successor. Perceptions of nepotism in succession can undermine nonfamily employee commitment to the business and their continued participation in the firm. Addressing this common issue can be difficult because the ability to choose a family successor and provide employment opportunities for family members is often a primary aim of family business owners. Thus, a key challenge for family businesses is gaining buy-in from nonfamily employees for the next generation of family leadership .

  • WT Will Tabor is an Assistant Professor of Business Administration at Mississippi College. His research focuses on family businesses and organizational ethics. His work has been published in Family Business Review and The Journal of Business Ethics .
  • JV James Vardaman holds the Chair of Excellence in Free Enterprise at the University of Memphis and is the author of Global Talent Retention: Understanding Employee Turnover Around the World .

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What ‘Succession’ Gets Right (and Wrong) About Business Continuity Planning [Spoilers]

Q&a with corporate experts to separate fact from fiction in everybody's favorite prime-time soap opera.

Succession_feat

[This post contains spoilers for the fourth and final season of HBO’s “Succession.” Proceed at your own risk.]

It’s in the very title of the show, so it should come as no surprise that HBO’s hit series “Succession” is about, well, a succession. Like other pop-culture depictions of transfers of power, the show is imminently watchable, but does it stand up to real corporate scrutiny? To find out, CCI’s Jennifer L. Gaskin asked a pair of experts for their thoughts.

From the outset of “Succession,” Logan Roy knows he can’t go on forever. The pilot episode’s first frames see a confused Logan micturating on his own bedroom carpet, mistaking it for a toilet in the middle of the night. And as the episode ends, the fictional media magnate lies prone in a hospital bed, unconscious and tethered to machines.

Just in case viewers hadn’t gotten the hint from the title of the show itself, HBO’s hit series, which ends its four-season run later this month, is a show about, well, a succession.

Logan seems to want one of his three youngest children to become the CEO of the company he founded, Waystar Royco, an expansive conglomerate, which includes cable news networks, newspapers, a movie studio, cruise ships and theme parks — think half-Disney, half-News Corp. He spends the next few seasons kicking the tires on all three kids ( adult kids , just to be clear) to see if they have what it takes to step into his job until he [seriously, spoiler alert] dies unexpectedly early on in Season 4. And there’s lots of corporate intrigue, professional and personal betrayal and even some likely felonies in between.

succession planning and business continuity

Of course, this isn’t the only piece of entertainment about an eventful transition of leadership. Indeed, Logan’s first bit of dialog as he’s whizzing on his bedroom carpet are the words, “Where am I?” spoken hundreds of years earlier by King Lear , another infirm monarch circling the drain. Even HBO itself has already tread deep into dramatizing power struggles with “Game of Thrones” and its spinoff, “House of the Dragon,” as well as shows like “The Sopranos” and even “The Wire” decades earlier.

ceo succession

As the Great CEO Resignation Continues, Does Your Board Have a Succession Plan in Place?

High-profile CEO departures put a fine point on a broader corporate trend: Top company leaders are exiting their roles in 2022 in greater numbers than early in the pandemic. Making the wrong hire at CEO can be devastating for a company.

So if “Succession” is of a piece with both aged and modern pop culture, what does that say about how connected to reality the show is from a business perspective? Aside from the fact that there seems to be no compliance function at Waystar, do other aspects of corporate life ring true?

Governance expert Amy Rojik, managing partner for corporate governance at BDO, and behavioral scientist Aaron Sorensen, a partner at corporate advisory firm Lotis Blue Consulting, each give the show — and the Roy family — a mix of high and low marks for business acumen.

A huge mistake, Sorensen says, is Logan Roy’s insistence on pitting his children against each other.

“The fatal flaw in CEO succession planning is creating a public horse race for the role,” he said. “That’s the worst thing you can do. And essentially that’s what happens at Waystar. And it’s family dirty laundry, the family’s out in public, it’s a horse race between the brothers and Shiv.”

But the dramatized version of the show does have some shades of reality in family-owned or family-involved businesses, Sorensen says: “From a continuity standpoint, you get the sense that Logan has in his head a succession plan for him that he’s sort of letting organically play out depending upon who’s more loyal. That’s not a good way to do things, unfortunately, I think that happens a lot, particularly in family businesses.”

And, as Rojik says, dysfunctional businesses like Waystar aren’t exactly unheard of.

“The storyline highlights critical business topics such as the value of culture and an independent board of directors, the importance of C-suite qualifications and evaluations, regulations and compliance of publicly traded entities and corporate transparency to stakeholders,” Rojik said. “The individuals jockeying for the coveted seat of the aging CEO, Logan Roy — a shrewd yet charismatic leader who commands respect and has demonstrated his worth — mirror dramatized versions of real-world traits common in business.”

(Q&A edited for length and clarity)

CCI: Does what happens on the show ring true regarding CEO transitions, particularly given the nature of Waystar and the centrality of Logan as a unique, somewhat mercurial CEO figure so deeply tied to the brand?

Amy Rojik: Mega corporations need to stay relevant, but most importantly, they need to know they have a strong leader at the helm who can navigate the company through good and troubled times, can think on their feet and do right by shareholders and other stakeholders. At the same time, leaders are just a heartbeat away from needing a successor. When a corporate brand is so tied to an individual, like Waystar Royco’s Logan, that raises the bar significantly for would-be followers. Any good organizational leadership and governance team worth its salt will establish a strategy for continuity and success of the company before any one individual.

Aaron Sorensen: I think it gets more things right than not. Anytime you’re dealing with an iconic CEO and a highly visible brand, it turns into very much a sociopolitical drama, both inside the organization — on the board — and then externally with shareholders. 

CCI: Often, characters on “Succession” seem to behave in ways that indicate there is no planning of any sort. How would you rate the quality of business continuity planning generally on the show?

AR: I can’t bring myself to rate their business continuity planning higher than an “F.” There is no plan in place for the top seat. Every dilemma faced over the past several seasons has seen even the CEO torn, despite continually testing all those around him and bringing in multiple outsiders for consideration. The Waystar Royco board runs around with their hair on fire every time they are forced to make a decision. Those decisions seem to be made, first, to please Logan and, secondly, for personal gain.

AS: One thing you don’t get as much glimpse into in “Succession” are board dynamics. Waystar is a public company. What the show gets wrong is that the board would be all over this. You get little glimpses into, like, “Oh, so-and-so is a 4% owner.” But you don’t get a sense of board governance and board dynamics. The board has a fiduciary responsibility to not let that happen, and you wouldn’t see it play out like that.

CCI: The show follows the Roy children more than the business folks because that’s what’s interesting to viewers. How does succession/business continuity planning get mucked up when there are family members embedded within the organization. What can family-owned or family-involved companies do to navigate that?

AR: As with any concentrated ownership structure centered around familial relationships — either in a public or a private company – there are often significant issues to navigate in terms of experience, leadership, industry expertise, relationships, charisma, ability to bring everyone to the table and demand actionable ideas. Well-run companies create opportunities for internal leaders to develop and demonstrate these essential skills. Inviting independent people into the organization to aid or advise in these tactical strategies while simultaneously creating career paths within deeper levels of the organization allows a company to have options when changes need to be made, and quickly.

AS: CEO succession planning is a very political process. Spin in some family dynamics, and it’s even more dramatic. There are more examples I can think of where the intersection of CEO succession planning and family business have gone poorly than not. What happens is these family-owned enterprises get so large, so complex, and legacy bumps up against business continuity and doing what’s right for shareholders and the business. And all of these things play out very publicly, because I think many people can relate to this issue of family dynamics and who ultimately gets the most love, as Logan does or does not show his kids.

CCI: Given its purported size and complexity, Waystar Royco would certainly have a chief compliance officer, but few of the characters act — and nobody in the family — act as if there is a corporate integrity function in this company. In the first episode, Logan has a stroke, but there’s a great deal of obfuscation about his health status in subsequent episodes. How would a functioning board handle that? 

AS: If you’re listed on the New York Stock exchange chain, if you’re listed on the NASDAQ, you have an obligation on behalf of your shareholders to have a succession plan in place. Part of succession planning processes now includes thorough medical examinations, and that gets submitted into the decision on behalf of the board on what candidate they want to put in place. Ultimately, the board takes that over, and that’s the board’s responsibility to make sure there’s a plan in place and that they’re looking at the right candidates.

More Than Sports: Managing New Title IX Compliance Complexities

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succession planning and business continuity

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Maximizing the value of your business to ensure a successful exit.

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Dr. Craig West is the founder of Capitaliz and has been working with business owners on succession and exit strategies for over 20 years.

Business succession and exit planning involve several critical aspects. Firstly, business owners must aim to maximize the value of their business before exiting, considering the potential risks and opportunities. With my experience helping business owners with succession and exit strategies, I've always found financial preparedness for a sale or transition equally essential, along with addressing personal goals, especially given increasing life expectancy.

As an accountant in practice, I was asked by several clients to help them prepare to retire, including selling their business. I did some research and found no process or methodology was used as the gold standard to help owners prepare for exit. I worked with several families and started to understand what the key issues were that needed to be dealt with to enable three things at the same time: the business needed to be sale- or exit-ready, the finances (both business and personal) needed to be ready to transition to retirement and, finally, the owners themselves needed to be ready for life after business.

One of the first clients I helped sold for far more than expected (because they spent years preparing) and donated $5 million to charity. They sent me a card and a copy of the receipt for the donation. I decided straight away that this was far more enjoyable and far more important than accounting and focused entirely on business succession and exit planning.

One fundamental approach I've written on previously is the 21-step process organized into five stages, all centered around value. The first stage focuses on identifying value, understanding desired outcomes and assessing the current state of the business. This involves analyzing potential issues and protecting, maximizing, extracting and managing the value of your business, ensuring financial stability for future generations. This includes investment planning for retirement, asset protection and estate planning to provide for family and future generations. Overall, these stages form a comprehensive framework for successful business succession and exit planning.

Best High-Yield Savings Accounts Of 2024

Best 5% interest savings accounts of 2024, navigating the roadmap to business exit and succession planning.

As a business owner, you're likely aware of the importance of preparing your business for future transitions, whether that involves selling, passing it on to a family member or simply retiring. Below are the essential steps and considerations to ensure a smooth and successful exit or transition.

1. Set clear goals with the end in mind.

It's crucial to start the exit and succession planning process with clear goals. Consider answering the following questions: What do you want to achieve with your business exit? Are you looking to maximize its value, ensure its continuity with a family member or simply retire comfortably? Identifying your desired outcomes is the first step in creating a solid plan.

For example, several times I have worked with businesses with multiple owners and have seen goals entirely mismatched. Owner 1 wants to sell in ten years when they turn 70, Owner 2 is ready to go right now as they have been working 80 hours per week and Owner 3 wants to keep the business to allow her kids to take over in the future. These goals are not compatible and cannot work together without considerable discussion and rework to make sure we can get to some sort of aligned/agreed strategy.

2. Assess the current state of your business.

To prepare your business for a successful transition, it's essential to assess its current state. This includes understanding its current value, potential risks and overall standing in the market. When conducting a thorough evaluation, identify areas that may need improvement and strategies to enhance the value of your business.

3. Protect your hard-earned value.

Protecting the value you've built over the years is a critical aspect of the planning process. Financial planning discussions are essential to address questions about retirement funds, asset management, tax planning and funding gaps. It's also vital to have documentation like shareholder agreements in place to provide clarity in case of unforeseen events.

From my experience, owners seem to focus on growth and sales and not risk. The process of asset protection, risk management and documenting outcomes for unplanned events (accidents and illness) is hard work for most owners, and so it typically gets avoided. Everyone has a story, though, about an owner who got seriously ill or had a serious accident and went through a divorce or partnership dispute you don't need this until you really do need it.

4. Maximize your business value.

To make the most of your business exit, focus on maximizing its value. This involves reducing risks, improving productivity and enhancing performance. Develop strategic plans, align financial models with your strategy and ensure all aspects of your business are well-prepared to drive performance. Setting specific targets and creating a strategic plan is key to achieving your financial goals.

Keep in mind that this can take two to three years to implement properly. I can think of at least five clients who decided once this stage was completed not to exit. These businesses are now less risky, more enjoyable to run, make more money and in need of less owner time.

5. Extracting value with due diligence.

The extraction stage involves the actual liquidity event or transaction. Be sure to consider the tax implications, which can be intricate and time-consuming. Proper documentation, including due diligence materials, is crucial. Decisions on who to sell to and how to sell your business are central to this stage.

For example, I once helped a family exit a water filter business. We promoted stories in industry magazines about the rapid growth of this business and how many water coolers we had installed in the last quarter. This led to two different listed companies approaching us with an offer to buy and we used the competitive tension to increase the offers and they ultimately sold for a premium.

6. Manage your business's value post-sale or exit.

After successfully exiting, it's vital to manage the value you've extracted. Think about where to invest to secure your financial stability during retirement. Additionally, consider asset protection and estate planning to provide for your family and future generations.

A successful business exit and succession planning requires careful consideration of your goals, an assessment of your business's current state, value protection, value maximization and strategic extraction. By following these steps, you can pave the way for a prosperous and secure transition, ensuring your hard-earned legacy lives on.

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Craig West

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The Visionary Path of Novastone Capital Advisors: Transforming & Leading High-Growth Businesses

Novastone Capital Advisors is a globally recognized, Swiss-based search fund (Source: NCA)

There aren't as many tales as vibrant and inspirational in the ever-changing world of private equity and global entrepreneurship as Novastone Capital Advisors (NCA) . In 2019, Christian Malek, a perceptive and imaginative leader, founded NCA, which not only became a successful business but also signaled a shift in the private equity industry. Since its founding, NCA has led the way in tackling one of the most difficult problems facing the business community: the problem of succession in family-owned small and medium-sized businesses (SMEs). 

Digging deeper into this organization reveals a story of aspiration, inventiveness, and a deep comprehension of the entrepreneurial scene. With a portfolio that includes over 16 acquisitions in just a few years and a startling 20% market share, NCA is proof of what can be accomplished when visionary leadership and a strong, creative model are combined. This is a story about more than simply market supremacy and numbers; it's a story about enabling the next generation of entrepreneurs, safeguarding legacies, and radically changing the way high-growth businesses pass into new ownership. 

The Origin of NCA: A Vision Born from Legacy and Experience 

"The roots of entrepreneurship in my family taught me the significance of legacy and the complexities of business succession," reflects Christian Malek, founder of Novastone Capital Advisors (NCA) . Having grown up watching his grandfather's healthcare company struggle with succession planning, Christian recognized early on how important it is for family-owned businesses to have long-term transition plans.  

Furthermore, his father's career in the Swiss embassy exposed him to international business dynamics, shaping his global market understanding. "These experiences," Christian notes, "were instrumental in identifying the gap in the market: the need for a new model to address succession in high-growth businesses”. His impressive expertise in banking and private equity, along with his extensive international exposure, served as the ideal incubator for his innovative concept. With NCA’s 2019 launch, the private equity market saw the start of a new paradigm in their industry. 

Redefining Entrepreneurship Through Acquisition (ETA) 

A key factor in NCA's success is its innovative Entrepreneurship Through Acquisition (ETA) program. With the help of this creative strategy, professionals in their mid-career may now find, buy, and expand well-established SMEs. Merely 1% of candidates successfully complete the company's demanding selection procedure, guaranteeing that only the most gifted and motivated people run these companies. This painstaking method has changed the game and helped NCA stand out in such a crowded industry. 

Impactful Acquisitions, Global Reach, and Operational Excellence 

"In just a few years, we've achieved what many firms aspire to over decades," states Daniel Gaertner, Managing Partner at NCA. With over 40 employees, 50 program participants, and 16 acquired companies (with a combined enterprise value of over $220,000,000) across Europe and North America, its rapid expansion into the US market in 2021 is a clear indicator of its growing influence. 

Every achievement tells a story of revived operations, enduring legacy, and fresh leadership, demonstrating NCA's dedication to expansion and continuity. This is all thanks to the leadership team, spearheaded by Christian Malek, where each member brings a unique set of skills and experiences, contributing to the company's strategic direction and operational excellence.  

The Novastone Difference: A Beacon in Private Equity 

NCA 's ability to handle succession challenges in a way that honors business traditions while bringing in new leadership and vision is what truly makes it stand out. Everyone who is involved in NCA's approach benefits, including investors, new business owners, and retired business owners. They have gained a sizable market share and established themselves as thought leaders in the sector thanks to their innovative strategy. 

There is no denying Novastone Capital's influence on the business as it grows. The company's accomplishments, such as Sébastien Perroud's work with IAR Group Holding AG and other successful acquisitions, attest to its effectiveness and influence. With its current growth, innovation, and leadership trajectory, Novastone Capital is well-positioned to positively influence high-growth business succession and entrepreneurship. 

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  2. Creating a Successful Business Succession Plan

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  4. Continuity and succession planning: PwC

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COMMENTS

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  7. Continuity and succession planning: PwC

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  15. What is Succession Planning? How to Ensure a Seamless Business Transition

    The objectives are straightforward: business continuity, smooth role transfers, preservation and sharing of institutional knowledge, and employee retention. Ideally, succession planning ensures that when a key employee departs, a designated successor is prepared to take over the role without disrupting the work.

  16. COVID-19: Business Continuity and Succession Planning

    Succession and contingency plans should include identification of successors, interim personnel and/or shared duties and responsibilities among existing personnel in the event that certain personnel become unavailable to ensure continuity in the management and daily operations of the company.

  17. Your Business Needs a Succession Plan: Here Are the Basics

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  20. FINRA Issues New Guidance on Succession Planning as Population of

    The notice also describes related succession planning education, tools, and services. The Intersection of Succession Planning and Existing FINRA Rules. Although the notice states that it does not impose new legal or regulatory requirements, it is apparent that FINRA views succession planning as an integral part of business continuity.

  21. The Key to Successful Succession Planning for Family Businesses

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  22. Learn how to create a succession plan

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  23. What 'Succession' Gets Right (and Wrong) About Business Continuity

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  24. Maximizing The Value Of Your Business To Ensure A Successful Exit

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  28. The Visionary Path of Novastone Capital Advisors: Transforming

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