Developing a comprehensive succession strategy is often an overlooked and dreaded task of senior management. As a result, research shows that without a robust succession plan, many businesses will not survive. In the case of family businesses, only 30% survive into the second generation, 12% survive into the third generation and only 3% survive into the fourth and beyond generations.
Succession planning considers: 1) Key leadership positions within the company and candidates and training needed to ensure continuity of the mission, value and profitability of the enterprise;2) The realities of estate taxes, life insurance and investments on the business viability; 3) Business and family relationships and dynamics. Done incorrectly- the succession plans can cause irreparable divisions among family members and 4) The need to implement a structured approach to review and revamp succession plans on a known schedule.