Did you know that it is impossible to not communicate? In the same way, you can’t be in business without a succession plan. Whether or not you have spent the energy and taken the time to engage a host of experts to help you plan for the transition to the next generation of owners and leaders, you have a succession plan.
Somewhere along the line, your heirs will benefit from what you’ve done or they will suffer because of what you did not do. At some point after you’ve left the business, your formal succession plan will become a garden from which your successors grow, or your undocumented plan will become a prison where they labor.
Whether their lives become a prison or a garden will be influenced at least in part by your VBA Index. “What’s that?” you say. Well, that’s the measure of connectivity among your:
- Values – what is important to you;
- Beliefs – what you believe to be true even though it cannot be proven; and,
- Attitudes – the day to day behaviors and habits that are deeply rooted in our values and beliefs.
The ‘Prison Where They Labor’ Scenario
When there is no future planning done regarding the sustainability of the business, or the professional and career interests of your heirs, you create a prison where they labor. This happens when:
- You see the future as their problem and not yours.
- There is a strong disconnect in your values, beliefs, and attitudes. For example: family is the most important thing in my life (value), but I don’t need to plan for their life without me because I’ll live long enough (belief) to take care of succession planning when it’s really important (attitude/habit called procrastination).
- You do not have any obvious or eager successor candidates, and plan to sell the business at the time of your retirement.
- You don’t believe that Succession Planning has anything to do with increasing the value of your business.
- You give your heirs too much credit because they are smart and you think they will figure it out just like you did.
The ‘Garden Where They Grow’ Scenario
In this scenario, you take charge of creating and growing a culture capable of weathering the storm of ownership transition by knowing what the next generation wants to do with their personal and professional lives. As a result, you have several opportunities that some of your colleagues may never have:
- An heir-appreciated legacy that can continue without your direct involvement, regardless of your state of health.
- No comments from colleagues and/or family about undervaluing personal relationships and overvaluing profits.
- The opportunity to watch people grow and mature as stewards of the business, responsible corporate and community citizens, good family members – whatever role they happen to be playing as parents, children, siblings, partners, or close friends.
- Knowing that your heirs are saying to each other, “What a wonderful legacy we’ve been given.” (Your business and your money are not your legacy; they’re just your business and your money! Check out Ebenezer Scrooge if you have any questions about that).
What Next?
Well, if you don’t yet have a formal succession plan that deals interdependently with satisfying (1) your motives and personal interests, (2) optimizing your personal estate planning, (3) building the value of your business, and (4) providing a framework for healthy family dynamics and family governance, then you might want to question whether or not you really have a succession plan. Not having one is a good blueprint for building the prison. Having one that meets the four criteria named above is a good way to cultivate the garden.
It’s your choice. Just remember to protect all that you have grown and build the foundation for future growth.
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