- By: Lorraine Salazar, Owner of Sal’s Mexican Restaurant Group
Succession and Continuity Planning are rarely among business leaders’ favorite activities. We enjoy doing what we know best, though we rarely have time to do that when caught up overseeing day-to-day operations and putting out fires. Few of us have firsthand experience planning for management and leadership succession.
Yet we all know succession will and must happen if our businesses and organizations are to survive and thrive. Consequently succession planning deserves and requires a sustained effort by senior leadership and boards of directors.
Too often we business owners—especially those from family owned enterprises—have thought about succession and possible successors but we keep it pretty much to ourselves. No help at all if we or our senior leaders come to a sudden tragic end. Even if we live to a ripe old age, failure to actively prepare for transition will likely to result in decline or outright failure of the business.
Succession isn’t an event. It’s a process/ worked at/ over time/ involving a number of people. One recent study of succession planning found that of family firms who started transition planning 10 or more years in advance, 86 % were successful 15 years later. Among those who initiated such planning 2 to 10 years earlier, 50 % were still in business and doing well 15 years later. Of those with less than 2 years’ active planning, 75 % failed within the next 15 years.
Family business succession is complicated by family dynamics and “family baggage.” But the principle that early planning greatly improves the odds of long-term continuity holds true for all companies and organizations.
Fortunately, we have many resources to assist us once we’ve made the commitment to the planning process. The most obvious are a large number of books and articles as well as workshops on the topic. Our professional advisors also can assist us. Don’t overlook business peers who are already working at it.
Two highly regarded local businesses have, in addition to a more formal process, invited their younger managers to meet on their own to discuss what they believe are important components of leadership of the business in the future. They engage in frank discussions of their own and each others’ strengths and weaknesses. Current senior leaders host half day to weekend long retreats with these upcoming young managers once or twice a year, allowing them to become better acquainted with each other and their thinking.
Your Fresno Chamber of Commerce is engaging in leadership transition planning this year. So is my family business Sal’s Mexican Restaurant Group. What are you and your company doing?