Seeking Succession

Whatever your view of Succession planning may be, Remember this!

2014-03-17T14:35:00.001-04:00

Succession Planning Builds Value, today and tomorrow for whatever "end game" you may have in mind. Sell, liquidate, or pass on to a family member or key manager.

How Do I Get People Focused on a Model of Excellence?

2014-03-12T14:38:00.002-04:00

If you want people to focus, you have to give a clear picture of what you want to have happen. Business is a funny animal. Sometimes we start out building a racehorse, and we wind up with a camel that can be more stubborn than a mule. All three are useful; all have their place; and all can get you where you want to go. But the ride’s ease and comfort in getting there will be different.

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Accountants and Business Succession Planning – How to become a succession planner

2013-07-31T09:58:00.000-04:00

Accountants who seek new challenges and opportunities can be full-time dedicated succession planners. In fact there are many progressive accounting firms that have partners dedicated to being proactive in succession planning. These specialists within the accounting firm work with existing clientele and also serve as an independent profit center as they pursue new clients outside the realm of the current client base. Minimally, succession planning specialists within an accounting firm boost partner-level revenue and score project opportunities for other specialists in their practice like business valuations, feasibility studies, and research projects which are part and parcel to succession planning.

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Accountants and Business Succession Planning – How to get more involved

2013-07-24T10:30:00.000-04:00

I am fortunate to have many wonderful relationships with my clients' accountants. We take a sincere interest in the each other's welfare and they recognize the high degree of personal gratification I receive from significantly impacting their clients' succession planning. The conversation often includes them telling me, "Loyd, you are doing what I have been wanting to do." So in addition to being asked my opinion of an accountant's role in succession planning, I am also asked if an accountant can be a succession planner.

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Accountants and Business Succession Planning – What’s their role?

2013-07-17T13:52:00.000-04:00

As a dedicated business succession planner my most important role is team facilitator. My role is to ensure that my clients have a complete planning team that represents the necessary disciplines needed to accomplish business succession, and that the team has the appropriate vision and works together effectively. Just like operating a successful business, business succession planning requires ultimate team work.

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360 Slam Dunk! – Preparing your successor for business succession

2013-05-07T07:30:00.000-04:00

As a sports enthusiast, when I hear the term “360 slam dunk,” images of Michael Jordan soaring through the air high above the rim in a Chicago Bulls jersey flash through my mind, which I assume is the case for some of you as well. Unfortunately, this article is not about how to do a 360 dunk a la Michael Jordan but rather the benefit of utilizing a 360 Assessment as a successor preparation tool. The utilization of a 360 Assessment to help identify leadership gaps and coaching opportunities for prospective successors can be an invaluable tool.

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Reflecting On the Future - Succession Planning and Constant Changes in Federal Tax Law

2013-01-23T13:11:00.000-05:00

What will the future bring after the last year or so of frenetic estate and business succession planning? I don’t have any better crystal ball today than I had last year when I was advising clients to play “use it or lose it” with their gift and generation skipping tax credits. However one thing is for sure, estate and gift tax rates have increased to 40%. That means more liquidity will be required to transfer business interest to the next generation. After adding the State inheritance taxes most taxable estates will be taxed at 50% or more. A 50%+ transfer tax would lead me to believe that there will be no significant let up in estate planning. We have already seen a spurt in activity from those who intended to do something yet did not get around to it and now feel as though they have been given a reprieve from the curse of procrastination by the continuation of the estate tax credits. On a related note, I would anticipate seeing a campaign by the IRS estate auditor to challenge discounting. There may have been some hasty valuations prepared last year, and I have no doubt that if after a few test audits they find a trend, the IRS will recognize low-hanging fruit and begin auditing 2012 gifts with vigor.

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Reflecting On the Present - Succession Planning and Constant Changes in Federal Tax Law

2013-01-16T10:05:00.000-05:00

Here it is late January 2013, and I know I am not alone feeling both emotionally and physically tired. The holidays went by like a runaway Power Point presentation. My get-up-and-go has got-up-and-left. Clients that were calling every other day are not to be heard from. They don’t want to talk to me, and for a spell the feelings are mutual. With the last minute tax deal which affirmed all the estate tax, gift tax and generation skipping tax credits and exemptions that we were afraid of losing were here to stay for the moment, there is a bit of an empty feeling. There’s been some soul searching generating questions such as:

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Reflecting On the Past - Succession Planning and Constant Changes in Federal Tax Law

2013-01-09T12:57:00.000-05:00

The last two years have been very exciting and challenging. As soon as the Republican leaders figured out that President Obama’s definition of finding compromise and achieving consensus meant everyone acknowledging that he was the only brain in the room and agreeing with his ideas, it was assumed that that the President Bush tax cuts were going bye-bye. Consequently, the estate and gift tax rates were going back to 55% and the estate, gift and generation skipping tax credits and exemption were going back to $1MM. All the attorneys, accountants and technical gurus were forecasting a perfect storm for the supreme taxacrat—without burning any political capital he could just continue in an unproductive deadlock by being naturally condescending and arrogant; he could achieve a tax increase on small business who he defined as rich; and he could blame the deadlock and resulting tax increase on the Republicans. Because of this, starting in early 2011, the tax planning community has been working on the utilization of the estate, gift and generation skipping tax credits under the assumption that after December 31, 2012, they would be lost. An extraordinary amount of emotional energy has been spent convincing clients that the days of procrastination are over. Use-it-or-lose-it is had become a reality. The days of excuses were over.

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Where in the World Did You Get The Idea That People Never Change?

2012-12-06T09:17:00.000-05:00

Sometimes our beliefs hold us back. I am talking about what we consider to be “a fact”. If I had more time and room, I could cite comment after comment that was proven to be inaccurate. Perhaps one of my favorite misquotes is attributed to a former Director of the Patent Office, who supposedly said in 1899 “Everything that can be invented has been invented.” There’s really no proof that Charles Duell ever said that, so I use it to prove my point and not to trash the former Director.

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How to Use Coaching to Develop Successor Leaders

2012-11-29T10:12:00.000-05:00

Studies conducted by various authors and organizations indicate that it is becoming increasingly difficult to be a successful leader. In fact, among the Fortune 500 CEOs over the last 20 years, 30% have lasted fewer than 3 years. According to the Harvard Business Review, an astonishing 40% of new CEOs fail in their first 18 months on the job. Statistics like those aren’t important. Usually. But suppose we’re talking about your successor. Do you want your successor – and in a family owned business that means your daughter or son – to be one of those casualties or do you want them to become part of the 60% who succeed?

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The SOAKWU Epidemic: The Great Threat to Succession Success

2012-11-21T09:05:00.000-05:00

Recently a client – Steve – expressed great concern about complacency. “I think it’s creeping into the organization and the family; and I’m not sure I know what to do about it. Our numbers still look good, but we seem to have lost the ‘fire in the belly’ that drove us for so many years.” When I asked him to be more specific, he talked about “cruise control” management; “no one is as good as we are and we’ve paid our dues attitudes”; and entitlement episodes among immediate family members.

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Successor Development - Trust the Trustworthy

2012-09-05T10:22:00.000-04:00

As I go about the closely held business market working with clients and meeting prospects, Successor Preparation and Development and Exit Strategy are very active subjects. The states of mind I encounter in these business owners range from peace and excitement of their impending succession to turmoil and anxiety. Those at peace tend to have a diversity of interests beyond the business and are excited about what they will be doing when they transfer leadership and management responsibility. They are also excited about what their successors will do when they get their time at the plate as they’ve spent quality time and effort training and mentoring them. These owners are proud of their achievements with respect to making the business not dependent upon them. They neither profess perfection nor expect perfection recognizing that their successors will make mistakes and learn from them just as they once did. Most of these at peace owners believe that their successors need to hit only about as well as Hall of Famer, Ted Williams (.402), to take the business to even higher levels of success.

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Bigger versus Better - Business Growth and Succession Planning

2012-08-29T09:19:00.000-04:00

Succession planning is all about the long-term continuation of success through the next generation of owners and managers. Discussions of long range success generally bring up the subject of growth. This is a natural discussion because inherent with the concept of being successful is the assumption that successful businesses are vibrant and “growing” businesses. Furthermore, there are many who believe that succession and growth are synonymous. This belief is based upon the assumption that if you are preparing for the continuation of success there must be growth because competition is increasing and margins are decreasing.

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Succession Planning Builds Value - Manufacturers Are Beginning to Understand and Promote the Benefits, Part 2

2012-08-22T10:13:00.000-04:00

“Big Boy” corporations such as manufacturers and franchisers are in recovery mode from the business downturn of the last four or so years. As these organizations reflect back to lessons learned, they have identified that poor distributor succession circumstances was a critical reason they took such a financial beating. Simply, their dealers and franchisees had spent all their time working in their business rather than on their business, which would have better prepared them to be able to weather the storm.

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Leadership Succession - Whom Do I Develop?

2012-08-09T09:53:00.000-04:00

Not too long ago, I spoke to a fairly large gathering of people involved in Human Resources, Organizational Development, and Talent Management. Some worked for privately held businesses, some worked for the publicly held sector, and some worked for the government sector. Regardless of their affiliation, all had questions about what groups of people get the benefit of development dollars.

When this topic inevitably came up, I shared a story that goes back more than fifteen years. My client and I were finishing the definition of the scope of the development project under negotiation. Tom made it clear that he wanted family members involved, and then he added, “I don’t have to do everyone do I?” To that I replied, “Of course not, Tom. You just tell me whom you want to leave ineffective and non-productive; and we’ll skip right over them.” Tom decided to include everyone.

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Successor Development and Talent Management: What Makes It So Hard?

2012-08-02T10:19:00.000-04:00

Companies like to say that people are their greatest asset. If that’s really true, why are so many organizations unprepared for facing the challenges associated with recruiting, selecting, and retaining the right people in the right seats?

According to one COO I interviewed recently, “Talent management puts you under strain because it stops you from doing what you are rewarded for.” This COO’s sentiment, one that I find many executives agree with, is one of the major obstacles to developing talent, family or otherwise: people simply don’t believe that’s what they’re paid to do.

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6 Steps To Engraining the Succession Planning Mindset Into Business Habits

2012-07-26T09:11:00.000-04:00

As a Certified Succession Planner™, I have the great privilege of talking with business owners, family members, family member employees, and key managers in those businesses. In one of my most recent sessions, one of the participants asked, "How do you form the habit of thinking about succession and taking action to make sure that it happens?"

That really is a good question. We see later generation leaders vowing that what happened to them will not happen to their spouses, children, or key managers. Even with the best of intentions, however, we still seem to set ourselves up to repeat history.

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OPPORTUNITYISNOWHERE

2012-07-19T10:41:00.002-04:00

Take a close look at the run together letters above? Now, without changing the sequence of the letters, break those twenty letters into a sentence.

If you've had a particularly difficult day or few days, your sentence might read "Opportunity is nowhere." That's most likely the case if you've gotten disappointing results after completing the "Where Are My People" (WAMP) analysis discussed in my previous blog post. All of a sudden, you have no successor and things aren't looking real bright when it comes to the key managers and leaders within your organization either. You might be thinking, "What have I done with that list of business brokers? I know it's around here somewhere."

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Did Your Successor Just Leave?

2012-07-12T09:37:00.003-04:00

Sometimes a telephone ring sounds ominous. When I answered a call from Cliff last Wednesday, that proved to be the case. "You're not going to believe what just happened. Jack came into my office and told me he is leaving in two weeks! I can't believe it - he's the person I've been counting on to be my successor! Now what do I do?"

"You start looking for another one," I replied. "And this time, let us help you find someone who really wants to be number one of your organization and fits your culture. Ambition may open the door. It's commitment that keeps what's inside appealing."

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Manufacturers Are Coming Out of the Succession Ether - Part 1

2012-07-11T09:43:00.001-04:00

The big boys are coming out of the succession ether. These "big boys" are the franchisers and manufacturers representing a wide range of industries that rely on entrepreneurs to sell their products and make their customers happy.

Until recently, these big boys acted as though they didn’t respect the talents of their distributors nor acknowledge their vested interest in their ongoing success. The predominate opinion was:

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4 Keys for Picking the Successor that is Best For Your Business

2012-07-06T12:32:00.000-04:00

There is another Dan Schneider walking around somewhere is the U.S.A. I don't know where he lives, but I know a little bit about what he does. Apparently his skill sets include acting, television productions, and related work that particularly attract the attention of early teens.

I know this because someone who publishes celebrity phone numbers on the web has posted my office and cell phone numbers on that site. So, when I get calls now asking if I am the "famous Dan Schneider", I simply say "Yes, I am the famous succession planner; the other guy is the movie star/television producer."

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How Financial Independence Can Impact Succession and Growth Goals

2012-07-03T09:48:00.000-04:00

We live in the greatest country in the world! As we prepare to celebrate Independence Day, I thought it would be an appropriate time to reflect upon how fortunate we are to be Americans. Each day when we wake up, we have the freedom to choose how we will invest our time, talents and treasure. Thanks to God and our fellow Americans who have gone before us and who have made the ultimate sacrifice to provide us this luxury, we have the ability to make choices each day. Some of us choose to invest our time, talent and treasures pursuing the American Dream by working for others while some of us choose to build businesses to provide opportunities for others and in an effort to achieve financial freedom and independence. Achieving financial freedom and independence is a challenging endeavor that requires focus, commitment and discipline.

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How to Hire the Right People

2012-06-19T15:23:00.000-04:00

Regardless of what business you are in, you and your business are only as good as the people that work for you. This sentiment has been shared with me consistently over the past seventeen years regardless of where I have traveled in the United States or the type of family business I have been engaged with at any given time. Recently I attended a local Association for Corporate Growth (ACG) event in Orlando titled “2012 Smart Awards” which recognizes companies in Central Florida that have distinguished themselves culturally, creatively and through the economic impact they have made in the community. Without exception, each of the CEOs that were recognized expressed gratitude and appreciation to their employees who in large part are responsible for the daily success of the company. Having the right people on your team and in the right position can be the difference between success and failure.

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Strategic Planning and Succession Planning: Expertise and Time Frames

2012-05-30T09:37:00.000-04:00

As we have been discussing, strategic planning and succession planning are two different long term endeavors that have many similarities. In my previous post, we looked at the differences in the goals and scope of these two very important leadership and management initiatives. So that we can achieve even more clarification between these two, we will consider the focus and term of strategic and succession planning and how they differ.

If you have a succession plan you have a strategic plan because the Succession Matrix^® considers strategic planning one of the ten interdependent factors essential to a complete succession plan. However due to the difference in scope of these two endeavors, it is important to remember that just because you have a strategic plan, you do not necessarily have a succession plan.

Although a facilitator is needed for both of these similar endeavors, the background and perspective of a strategic planner and a succession planner are very different. A strategic planner’s primary prerequisites are an understanding of the operational circumstances of the industry, understanding of an effective strategic planning process (there are multiple approaches) and strategic planning experience which will provide much needed leadership to a group that generally wishes they were back on the job versus hanging out in the boardroom for a couple of days. In contrast, a succession planner must have a journeyman’s understanding of each of the factors of the Succession Matrix^® including strategic planning as well as an understanding of the interdependent nuances of all the factors. The behavior, knowledge and experience expectations are much higher for a succession planner. At any given time the succession planner can be put on the spot regarding any issue from one of the ten factors of the Succession Matrix^®. Although succession planners are typically an expert on one or more these factors, they do not have to be an expert in all the factors. However, succession planners must minimally have sufficient knowledge and/or experience with all factors to be conversant and in the absence of expertise, know where to go to get answers. Moreover, the succession planner carries much greater responsibility because they must personally have or have access to specialized core competencies that can effectively address all issues identified by the succession planning process.

And finally, the term of Strategic Planning considers a time frame of two to ten years or as far out as resources can be confirmed. In the absence of confidence in forecasted resources, setting goals is no more than visioning and strategic planning is a waste of time that could otherwise be spent in the development and confirmation of resources. In contrast, the term of succession planning is ultra long term; a cross generational consideration of 30 plus years that speaks to continued success through the next generation of owners and managers. And there you have it, the similarities and the defining contrasts between strategic planning and succession planning.

Think I've left out any other differences between strategic planning and succession planning? Feel free to comment below with your additional differences.