Let’s face reality.  We are all going to pass on someday, so we might as well be prepared and lessen the burden for those following behind us.

One of the first steps in effective succession planning is to gather in one place all of the institutional knowledge stored in the current generation’s head.  This may seem like an impossible task, but the process itself will pay big dividends for this generation and for those in the future.

Succession Exercise

This is different from a conventional succession plan, which often focuses solely on the larger issues. At least initially, this is a nuts-and-bolts exercise. But as it develops, this is an ideal Topportunity to capture important family and business history, as well as key operational information.

The information that should be gathered from this exercise is:

Basic operations

  • Key contracts
  • Bank accounts and bank contacts
  • Customer contacts and preferences
  • Legal, tax and accounting information and contacts

Leadership succession

  • Key management
  • Emerging leaders
  • Those being developed

Ownership succession

  • Family
  • Employees
  • Third parties

Individualized Succession Planning

There is no “right” format for this exercise.  As with many things relating to succession planning, the real value is in the process itself — thinking about it, getting something down on paper, and then communicating the information to family and key management.  This effort is sure to lessen the disruption inherent in any generational change – especially a sudden one.

Future posts will share insights from families who have discussed and fine-tuned their “hit by a bus” plan annually over several years.