Are You Gambling With What You’ve Built?

“Nothing is certain except death and taxes.” We all know this truth, yet we often treat business succession as strictly a topic for lawyers and accountants. This past week drove that point home when two of our long-time clients faced the sudden deaths of key partners. Beyond the trauma for families, friends, and colleagues, these losses created potential disasters for business continuity—disasters that could have been mitigated with proper planning on the people side of succession.

By all means, consult your lawyer and accountant about buy-sell agreements and funding mechanisms. But talk to us about the people questions that truly determine whether your business survives a transition.

Three Critical People Questions You Can’t Delegate

Identify and prepare successors. The key word is prepare. Identifying a family member, existing employee, or outside hire isn’t enough. Don’t assume your son, daughter, or key employee wants to take the reins. Effective communication is essential, and so are outside resources for training and coaching. Wanting the role and being ready for it are two different things.

Define management vs. ownership. Your plan must clearly distinguish who will own the business from who will manage it. Ownership requires business development skills, strategic thinking, and top-notch communication capabilities. Management demands technical expertise—financial acumen, technology proficiency, and people management capacity. This distinction drives specific training and coaching needs, particularly in small family businesses.

Retain key employees. Stability during transition is vital. Your succession plan should include provisions to retain critical employees through compensation packages and clearly defined roles. Here’s an uncomfortable truth: not every long-term, loyal employee is suited for—or interested in—leadership or ownership. Their value may lie in maintaining continuity in their current role, and that’s equally important.

The Bottom Line

The legal and financial aspects of succession planning matter, but the people side cannot be overemphasized. Communication, training, and coaching take time. They cannot be delegated to your CPA or legal team.

The painful truth? Life and death are beyond our control. You need to start now.

Time is always at a premium in the C-suite, but succession planning cannot wait. Don’t gamble with what you’ve built.