Succession planning considerations enter into discussions that I have with business owners when discussing their interest in conducting an executive search to find a CEO to run their company. For instance:
- As a business owner are you worn down and tired from all the extra effort and attention that you have had to spend on your business over the last few years?
- Have you wondered if there are viable alternatives to growing your business when sometimes you just want to kick back and relax?
- Knowing what you know now about the level of effort and energy to start and grow a business, do you think it is time for a change, perhaps an exit?
These are questions I often encounter when talking with business owners who have founded their business or who have taken over their business from a parent – and know that there is no one in their business who is capable of taking over the business when these current owners decide to move on. It certainly creates a quandary for them.
It’s especially challenging for these owners when they think it’s time to sell their business and realize that the business value is not what they expected to yield after many years of hard work and effort.
In my experience it’s helpful for owner(s) to take a step back and review the options they have when considering a business exit, because hiring a CEO to run their company is only one option.
Owners who go through a business succession discussion benefit from a review of the options as these will also consider their personal outcome goals, their company’s outcome goals, and what I call legacy goals. Oftentimes I find owners have not considered their personal goals and it leaves them at a disadvantage when seeking to objectively evaluate their company and legacy goals.
Think about it. If you are a business owner you most likely spend the majority of your time working on or in your business, with an occasional look up to reflect on what you might do once you exit the business. But when it comes time to exit the business – you have most likely have not developed your personal exit plan. Not having a personal transition plan will impact the choices owners make when deciding to exit their business.
Effective evaluation of succession alternatives does require careful planning. If, as an owner, you have not used business planning tools previously it may be challenging to follow a planning process, however, the benefits to a carefully thought-out succession planning process can substantially improve the succession choice to be made.
Succession alternatives range from business sale to an outside buyer, selling to your employees, or, my favorite, retaining ownership of your company and hiring a CEO to run the company so that you and the CEO can develop a growth strategy to improve the value of the company prior to its eventual sale.
There are several ways in which the succession planning discussion can occur. It’s important however, that the discussion occur. My purposeful approach to conducting an executive search for the CEO of closely held or family-owned company’s benefits from a succession planning discussion with owners because it helps them to engage more proactively in the executive search process.