Charles Doty of Blueshift Consulting talks about Succession Management
What can possibly happen? One of my business partners refers to the six D’s: death, disability, disagreement, divorce, disengagement, and disaccreditation.
When a key person in a small to mid-sized private company dies unexpectedly, his company may die with him. The value of the company is likely to decrease rapidly unless an effective Succession Management project is undertaken quickly.
Succession Management is a process developed to help companies get through the Succession Transition while maintaining the value of the business. A tremendous amount of value can be gained or lost during a Succession Transition, and many companies are underprepared to deal effectively with the crisis.
Each company is different, and often the problems are less related to the business itself and more to the relationships between individuals and groups who own the company, a roles and rules issue.
The first priority for a Succession Manager is to understand the owners’ needs and objectives during the transition. The first phase of this effort may not take long, but the entire effort is an ongoing process that continues through the entire transition. Then the current status of the company should be determined with a report on financial status, business processes, personnel, and anything else that is important to understanding the value of the business.
It is vital to maintain the value of the company, continue to operate the business, and assure all involved that it will continue in the future. It may be that the end result will be replacing the missing person or sale of the business. Whatever the ultimate resolution, the future value of the company will be maximized by maintaining good relationships with personnel, supply chain partners, and customers.
To see more about roles and rules and to find out how good outcomes are achieved, check our future posts.