This document discusses succession planning for family businesses. It emphasizes that adequate preparation is key to a successful succession process. Critical milestones include identifying a successor and transferring power and control. Both current leaders and potential successors must ask themselves difficult questions to assess readiness for succession. Advisors can help by clarifying roles and challenging clients to facilitate understanding.

1. SUCCESSION
PLANNING
Presented
by:
Wm.
(Chip)
Valu9s,
PhD
www.pcg-services.com

2. The
final
test
of
greatness
in
a
CEO
is
how
well
he
chooses
a
successor
and
whether
he
can
step
aside
and
let
his
successor
run
the
company
Peter
Drucker
www.dill.com.br

3. SUCCESSION
The
phrase
implies:
• An
Event
—
occurs
the
day
the
boss
quits
• An
End
—
seen
as
a
des9na9on
or
date
in
9me
• Nega:vity
—
being
pushed
out
the
door
or
placed
on
a
shelf;
influence
stops
• A
Barrier
—
something
that
must
be
overcome
or
removed

4. Succession
is…
A
new
beginning
A
process
A
racetrack
(con:nuous)
psdcollector.blogspot.com
en.paperblog.com
www.123rf.com

5. A
journey
Most
of
all,
succession
is…
fineartamerica.com

6. ADEQUATE
PREPARATION
IS
THE
KEY
This
includes:
• An
agreement
or
willingness
to
go
on
the
trip
• A
common
des9na9on
and/or
general
direc9on
• Milestones
for
monitoring
progress
• Fuel
to
sustain
your
journey
• Fundamental
skills
for
dealing
with
trouble

7. CRITICAL
MILESTONES
1.
Entry
of
the
next
genera9on
2.
Agreement
to
perpetuate
the
business
3.
Comple9on
of
strategic
plans
4.
Comple9on
of
estate
and
financial
plans
5.
Iden9fica9on
of
a
successor
6.
Transi9on
of
power
and
control
7.
Competence
and
sa9sfac9on
in
new
roles
www.theolympian.com

8. Guide
to
Obstacles:
A
Checklist
for
Failure

9. • Secre9ve
environment;
liRle
communica9on
or
candor
• Triangula9on:
Communica9ng
concerns
to
anybody
but
the
source
• Conflict
which
has
remained
ac9ve
and
unresolved
for
years
• Mystery
guests:
impact
of
spouses
and
others
not
directly
involved
in
the
business
• Families
who
stuff
their
feelings
un9l
periodic
explosions
occur
• Family
dynamics
and
issues

10. TIPS
FOR
SUCCESS
The
Business
• Clear
responsibili9es
and
appropriate
authority
• Accountability
and
consequences
for
performance
• Construc9ve
conten9on
• Sound
decision
making
and
problem
solving
• Clear
boundaries
www.pwkoffice.com

11. TIPS
FOR
SUCCESS
The
Family
• Support
and
encouragement
• Non-­‐family
mentoring
• Appropriate
educa9on
and
outside
experience
• Freedom
to
risk
• Conflict
management
and
communica9on
skills
www.upwardonward.com

12. TIPS
FOR
SUCCESS
The
Advisors
• Clarify
roles
and
boundaries
with
the
owner/family/
business
• Challenge
clients/deliver
bad
news
• Facilitate
understanding
instead
of
agreements
• Encourage
mul9-­‐discipline
interac9on
www.actioncoach.com

13. TOOLS
TO
PREVENT
PROBLEMS
• Guidelines
for
entry
into
the
business
• Formal
developmental
plans
• Family
councils,
mee9ngs
and/or
retreats
• Codes
of
Conduct
• Mission
Statements
or
Family
Creeds
• Advisory
Boards
or
outside
mentors

14. QUESTIONS
PARENTS
MUST
ASK
THEMSELVES
• Do
I
listen
openly
to
my
son/daughter
about
his/her
plans
for
the
business?
Do
I
encourage
such
dialogue?
• Am
I
able
to
encourage
autonomy
and
hand
over
areas
of
responsibility
to
my
successor?
• Do
I
feel
confident
about
his/her
leadership
abili9es?
• Am
I
able
to
take
9me
away
from
the
office
without
worrying
and
constantly
checking
in?

15. QUESTIONS
_____
MUST
ASK
THEMSELVES
• Have
I
aRempted
to
impart
all
I
know
about
running
the
business
to
my
successor?
• Do
I
trust
my
successor s
judgment
when
it
comes
to
handling,
spending
and
alloca9ng
company
money?
• Have
I
openly
championed
the
talents
of
my
successor
to
our
clients?
Allowed
him/her
room
to
deal
with
them
without
interference?
www.bjgoldreflections.com

16. QUESTIONS
SUCCESSORS
MUST
ASK
THEMSELVES
• Do
I
feel
capable
of
managing
this
business?
• Do
I
have
enough
experience
to
run
this
business?
• Do
I
have
a
clear
plan
for
how
I
would
run
the
business?
• Am
I
willing
to
take
on
as
much
responsibility
for
the
business
as
my
parents
do?
• Do
I
understand
and
respect
my
parents
way
of
managing
the
business?

17. QUESTIONS
SUCCESSORS
MUST
ASK
THEMSELVES
• Whatever
my
role,
do
I
willingly
offer
to
take
on
more
of
the
business
and
try
to
master
it?
• Do
I
seek
out
and
ini9ate
projects
of
my
own
and
follow
through
on
them?
• Am
I
able
to
seek
out
and
listen
to
my
parents
advice
and
comments
on
my
performance?
• If
cri9cized,
can
I
accept
and
objec9vely
evaluate
the
feedback?
• Do
my
siblings/family
and
I
share
a
common
vision
for
the
business?

18. Ques:ons
Advisors
Can
Ask
prometheism.net
apinke.com
ashtarcommandcrew.net
plus.google.com

19. • Are
you
fully
commiRed
to
family
succession?
Is
it
a
dream
you
deeply
feel?
• Will
your
spouse
and
you
be
financially
secure
a]er
re9rement?
• Will
you
choose
a
successor
and
set
a
firm
date
to
pass
the
baton?
• Do
you
truly
believe
there
is
life
a]er
re9rement?
• Does
an
absorbing
new
challenge
or
interest
await
you
a]er
you
leave?
• Are
you
able
to
delegate
decisions
and
authority?
• Are
you
willing
to
let
others
take
new
business
risks?
• Do
you
trust
key
people
with
financial
informa9on?

20. While
the
journey
can
be
difficult,
those
that
succeed
enjoy
many
benefits.
Be
deliberate;
be
courageous.
Work
the
issue
with
sincerity
and
expect
the
best
from
each
other.
The
rewards
are
many.
Good
luck!!