What do these families have in common: the Desmarais family of Power Corporation, the Péladeau family of Quebecor, the Dutil family of Canam and Manac, and the de Gaspé Beaubien family of Telemedia and the Business Families Foundation? They have all planned their succession well!
Succession planning is essential for ensuring the prosperity and survival of a business. I was shocked to learn, in a report recently published by metropolitan Montreal’s chamber of commerce, that, as a consequence of having no succession plan, about 10,000 viable Quebec businesses will close their doors within the next 10 years.
This figure is huge, especially considering that most of those enterprises could be saved by developing a succession plan, regardless of whether their leader’s departure is imminent or distant. Here are some tips to ensure that the next person to lead your business is ready to carry on its success after your departure.
Select the Right Person
If the first step to ensure the success of your business after you’re gone is to choose your successor, it is clearly necessary to hand over the reins to the right person.
The right person will fulfill two main criteria: he or she will have both the passion and the competence needed to succeed. Neither is sufficient on its own, for the person will need to be dedicated and to love the work, but also be able to deliver the goods.
Whether you choose to transfer or to sell your shares to a loved one or to an employee who knows the company inside out, the key is to make the best decision for your business, the one that will make it the most profitable. If you cannot decide whom to choose, ask a trusted neutral person to help you make the selection.
Prepare a Guide for Succession Planning
Too often I have seen heads of companies take with them upon retirement the recipe of their success and the knowledge they had accumulated over their years of leadership. However, if you want to ensure the continued success of your business, you need to prepare a succession guide that will transmit all your procedures, secret recipes (including the one that made your reputation!), methods, customer databases, supplier lists, and other useful information that will help your successor to continue your activities after you leave the ship.
Whether it is a matter of organizing your customers and your suppliers in an Excel file, standardizing your billing procedures, or documenting your production processes, a number of systems can be initiated so that your business can become less dependent on the individuals who compose it.
In the same spirit, ask your employees to pass along all the knowledge, contact lists, modus operandi, or other wisdom that they have acquired during their careers with you. I have lost count of the number of times that a seller lost customers to an employer who left with a stack of business cards that were the only record of the existence of these clients – yes, even in 2015! Do not make the same mistake; transfer your knowledge to your succession guide.
Plan A****head
Since a successful business handover does not take place overnight, do not wait until the last minute to prepare your succession guide. Slowly but surely, start to train your replacements by allowing them to take over some of your business functions. This will allow them to gradually familiarize themselves with the different tasks and to be ready when you decide to pass them the torch.
To read the rest of this article.
