As a succession planner I am avidly seeking to motivate business owners to take action. Unfortunately, I am not batting 1,000 due to a variety of reasons. Beyond my personality quirks and communication shortcomings, there are many business owners who do not want to become engaged. Irrespective of my attempt to demonstrate how “succession planning builds value” they have limited, if any, interest in addressing the issues that impact the continuation of business success. Timing may be bad or other priorities may be dominating if not consuming excess mental energy. Or perhaps these business owners lack the motivation and experience to spend time and money on something that will not fall strictly into their personal column of benefits.
These non-succession planners may not buy into the reality that in the absence of a proactive effort to provide for the continuation of business success, inertia begins towards business discontinuation. Furthermore, these blind, disassociated or apathetic business owners are not moved by the probability that the lack of succession planning will ultimately create challenges, frustrations and sacrifices for family members, key managers, employees and vendors. They either don’t care or they cannot look beyond their current circumstances.
The lack of succession planning also plays a role in the defining of the business life cycle. Where the presence of succession planning plays an active role in the continuation of business life, it’s also noteworthy that the absence of succession planning promotes the ultimate termination or death of a business. Although regrettable from a number of perspectives, the death of a business is an anticipated aspect of a prospering economy. The unfortunate loss of inertia, the decline in productivity and the ultimate collapse of a business creates opportunities. Although productivity declines for a period, where there is demand for products and/or services the void will be ultimately filled. New capital will be put at risk, new loans generated, new employees hired and ambitious, energetic minds will find new ways of doing old things cheaper and better.
In a free society there is no law to force succession planning. In fact there are some laws that discourage business succession such as estate tax based upon the belief that it is not good for the rich to stay rich or the powerful to continue to control. The assumption is that a little guy will step up and fill the hole created by the business discontinuation and ultimately become a big guy. Productivity is lost, tax revenue is lost, plans are changed but the business cycle starts again anew just as the old corn husks are plowed into the ground to create the new crop. The reality is that those who don’t want to pursue succession planning are playing a role in the anticipated generation of new business activity.
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