Mid-Market Outlook: Business Succession Planning
Mid-market perspectives blog: Growth enterprise services
Posted by Tom McGee on January 30, 2013
Effective leadership creates business value – and for good reason: capable and effective leaders can mean the difference between long term success and failure; between a flash in the pan and a valuable brand. The secret? One important element is creating a vision and then executing against it.
In many businesses, while so much effort goes into those activities that build a successful enterprise, often too little effort goes into determining who will take over when the founders leave the stage. And while it can seem premature to consider the end game when you’re just starting out or still in your prime, working without a succession plan can invite disruption, uncertainty, and conflict – and endangers an organization’s future competitiveness.
So why don’t more companies focus on this important task? For some, daily priorities crowd out the time required for this longer-term activity; for others, it may be that they just don’t know how to begin. To put it simply, succession planning is hard. It’s a complex process, and even the most sophisticated and knowledgeable business professionals can get caught in a web of complicated issues.
In response to our clients’ requests for more information on this topic, Deloitte has just launched the first in a series of six publications that will address all aspects of business succession planning. Volume 1, The Need for Planning, includes a quiz designed to help assess the effectiveness of your current succession planning efforts. While there are some basic questions about defining goals and identifying a successor, others around transfer of assets and business valuation may give you pause for thought about potential action needed. I think you may find that taking a few minutes to complete the quiz could be time well spent.
A recent Deloitte Dbriefs webcast described business succession planning as a question of demand and supply and suggested the following three-step plan for implementation: determine leadership demand, evaluate leadership supply, and mobilize to take action. The webcast also included a number of suggestions for evaluating talent and taking action; you can click here to view an archived copy of the webcast.
I know business succession planning is an important consideration for mid-market private companies and will share further insights on this topic in the coming months. As always, I welcome your comments and questions.