Building and Executing a Successful Succession Plan

Building and Executing a Successful Succession Plan

Building and executing a successful succession plan is one of the most difficult tasks to accomplish.  Many owners experience extreme frustration when trying to execute succession plans and even abandon them after many years of effort.

Succession Plans are Complicated and Require Years to Implement

The roots of these frustrations lie in the complicated succession plan process.  Succession plans require the use of many different coordinated disciplines. Some disciplines may be completely new to the owner, while others may require a style and substance opposite to the owner’s nature. The key to overcoming these challenges and achieving a successful succession plan is detailed implementation planning.

A Case History: The Sheet Metal Products Manufacturer

The owner of an OEM supplier of sheet metal components founded his business 25 years earlier. Entering his 60’s, he was ready to step down from active involvement in the business. He had a strong paternalistic interest in the company and its employees.  He had worked three years to implement a succession plan without success.  The owner was frustrated.

Our interviews of the owner and his managers provided an understanding of the issues. The owner was implementing a wide variety of succession related programs which lacked consistency. He would constantly shift his emphasis from one program to another in a seemingly random fashion. Management was losing faith in the entire concept of succession. It was clear he lacked an understanding of how the methods he was utilizing fit into the overall requirements of a successful succession plan.

We started by clearly defining the end result and working backward with increasing detail until we had a coordinated, step-by-step plan for the succession.  We began by clarifying exit verses succession goals. We then established a list of programs which needed to be in place to achieve those goals.

  • personal financial planning to quantify exit dollars required
  • documentation of company vision, missions and values
  • definition of key competencies and qualities required of the management replacing the owner
  • evaluation of existing current management against required competencies and qualities
  • programs for pushing decision making from the owner to the management team
  • development, installation and utilization of controls and reporting mechanisms
  • testing management performance
  • designing and executing the actual succession transaction

Planning, Execution and Patience Lead to a Successful Succession

Our client now understood each step and how the process would produce the desired result.  However, he had trepidation over the magnitude of the proposed project. We added outside assistance for the owner in project management methodology to our plan. This provided the owner with the necessary skills to keep the plan moving. Though it required three years, he had the pleasure of seeing his chosen and now proven management team close on the succession purchase of his company.


Completion of a successful succession transaction is difficult. Undertaking it as a complex project management and breaking it down into component parts allows the owner to address the complex process in a methodical fashion.  Approaching each component at the appropriate time prevents the owner from becoming overwhelmed and increases the opportunity for success.


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