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Ted Nixed His Succession Planning

Updated: May 28

Ted* founded a company that became highly successful and had a decidedly positive impact on its constituents. At sixty-eight years old, his board asked him to develop a succession plan.

With Ted's help, they sought to engage a national search firm in the industry to assist in recruiting a successor. The search firm declined to accept the opportunity, saying that they had experienced too many failures in recruiting for "founder-led" organizations. Their success in finding successors for founder-led organizations was rare.

As an alternative, a wise mentor advised that he should select his successor now and begin steeping them in the values that make the company successful.

From a narrow, limited search, three potentials emerged. They were all inexperienced and at entry-level in compensation. Ted hired them all. None lasted more than a year.

Like Ted, many founders struggle to see anyone in their role. Especially someone more capable. Intentionally or not, many sour the process of finding their successor.

This story highlights one reason why 70% of business transitions fail or get sold before the second generation of leadership ever gets a chance.

Succession planning is nixed when you fail to steep your stakeholders in the values that should follow you in your departure.

Building a pool of successors is vital to succession.

Steeping this pool of successors in the values that make the company great is a large part of successful succession planning.

Potential successors are expensive. You must pay your people well—especially that pool of potential successors.

Leaders must assess the true worth of potential successors and be willing to pay to keep them. Embracing the idea that there is no success without a successor makes paying competent people easier. And having competent people in the saddle as you exit ensures that they can pay you well as you leave!

Evan* founded a thriving independent church but knew that he didn't want to retire there. Ten years before his exit, he began to assess a pool of potential candidates to assume leadership when he left. When one candidate rose to the top, he poured himself into him. They developed a plan for Evan's exit and his replacement's elevation with trusted stakeholders. When Evan left, the church leaped forward and grew even more.

Edgar* founded an iconic brand. He and his younger brother use a facilitator to build their team and plan succession ten years out. They both have health, love to hunt and fish, and enjoy their grandchildren. As they plan their exit, there is plenty of room for both to remain active and valuable to the company. Their annual succession planning session helped them determine that family members can only be considered for joining the business after completing three years of building a skill or experience that the company needs somewhere else.

There is no success without a successor.

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*Like all my stories, Ted, Evan & Edgar's stories are real; their names and some particulars are changed to protect them.

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