Succession Planning is one of the most critical endeavors an organization undertakes.
In our experience, different companies develop succession plans for different purposes.
- Development and replacement of key leaders
- Clarification of key positions and the criteria required to fill them
- Develop a generation of a talent pipeline to fill key positions
- Specification of leader’s strengths and experiences to accelerate leadership growth of individuals and a total talent pool
- Provision of learning and development experiences to accelerate leadership growth of individuals and a total talent pool
- Development of the leadership success criteria and practices to generate the talent required to meet business strategies
Services
Exit & Succession Planning
Early planning to optimize wealth to support your life’s goals
Because the only reason to get into a closely held or family business is to get out, it is critical that your exit and succession planning is done early enough in your business to optimize your wealth in order to support your life’s goals.
Exit Planning
Owning a business starts with the end in mind. Understanding how you will ultimately get out of the business, and more importantly, how you will extract the wealth tied up in your illiquid business, provides the direction as to how you build and position your business on your journey to True-North.
Compass Point’s Exit Planning, part of our unique Ownership Planning™ process, works to protect, preserve, and promote the wealth tied up in your illiquid business, and create a strategy to get that wealth out on your terms. In the Exit Plan, we focus on the life plan first, then the business plan. A successful business is not an end in itself. It is a means to an end. It is a way to a better life for you and those whom you love, however you (and they) may define it. You must have a life plan first and then keep revisiting it, to make sure it’s up to date and that your business plan is helping you achieve it.
We help you create the vision of how to let go of the business and create owner wealth. Our process shows numerous ways to do this besides holding on to the business with a death grip until you die. We will help you navigate industry and market trends that may prove it appropriate to transition out of the business before it begins to decline, or acquire complementary businesses to grow, or pursue a partial liquidity strategy in order to ‘take some chips off the table’ and protect hard earned value, or merge or be acquired by a larger company that can give you access to a larger market opportunity. Which strategy or strategies to implement depends on your goals. Our process helps you navigate through these complicated issues and decisions.
Succession Planning
The numbers are staggering. According to the United States Small Business Administration, nine out of ten businesses in the country are either closely held or family run, but the odds of surviving the transition from the founding generation to the next are slim: only three of ten actually make it. Ownership succession to the third generation is even more unlikely: less than two of ten survive.
To avoid becoming a casualty of these succession statistics, senior management must come to grips with passing on the assets and management control from one generation to the next. How a firm succeeds at succession planning may be the ultimate measure of a company's health and management well-being. It will most certainly affect its competitive advantage.
Planning for the transition of management and the transfer of ownership begins with the senior generation grasping the need and becoming secure with the concept. The goal is not for an owner to simply walk into work one day and turn over the reins -- the goal is for the owner to understand that the process is necessary for his or her own lifestyle and retirement needs. This is the only way to ensure that the business, which may have taken a lifetime to build, will survive and flourish for the next generation of family or key employees to enjoy.
Our Succession Planning process is rooted in the understanding that addressing the future now allows the most time to successfully transition management.
Our process to develop critical leadership talent includes:
- Establish succession planning team
- Define competency models
- Conduct assessments and establish baseline
- Review current performance management system
- Understand business strategy and the needs of the future company that successor will need to fulfill
- Assess future potential talent
- Gap analysis
- Individual development programs
- Inventory competencies
- Assign accountability
- Implement, measure, review, revise if necessary…repeat!
