“There is no success without a successor,” said Harry T Jones, former CEO of Blackberry Patch, and business coaching specialist at Cultivating Impact during last week's SFA In the Know Webinar, “Seven Pitfalls to Avoid in Succession Planning.” He explained the potential slipups and remedies that specialty food business make when planning for the next generation of leaders.
Jones urged businesses to think about the longevity of the company from day one.
“The problem: 70 percent of all businesses fail to make it to the next generation of leadership,” he said. “This means that all the hard work you have given your life for will fade… This happens because of a lack of succession planning.”
To ensure a business can continue after the flagship team retires, a plan is needed, he explained. “You either plan to pass on your business, or you will have it taken from you.”
When drafting the plan, Jones identified the following pitfalls, providing anecdotes to illustrate ways to be proactive about avoiding them:
1. Failure of the leader to recognize the need for a successor.
2. Failure to see all options when deciding whether to keep a business in the family or sell it.
3. Failure to have an updated plan that is shared with stakeholders.
5. Failure to start planning soon enough.
6. Failure to leave enough margin in the plan to take advantage of opportunities.
7. Failure to steep stakeholders in a business’ values.
To combat the failure to have an updated plan, Jones advised getting relevant parties together to share the plan and discuss the future, even as it relates to people peripherally related to the company. In a family business, this could look like letting all other family members know.
“It is important that everyone involved with the business daily is communicating with everyone outside of the business,” he said.
When training family members for a business’ next generation, he advised that any family member that joins the company should also have experience outside the business, both to learn valuable skills, and allow the marketplace to set the family member’s value. This ensures that a family member is not unfairly paid in relation to others in the company, and will fortify a company’s resilience, as it will build a “pool of success” where a business is made up of highly skilled, passionate leaders.
To learn more about how to best plan a business for the next generation, watch the webinar on demand in the Learning Center.
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