What We Talk About When We Talk About Succession Planning
Some topics don’t lend themselves to easy conversations.
Business succession planning is certainly in that camp, whether you’re speaking to a CEO or an entrepreneur who built a small business from the ground up. Consider this: According to The Wall Street Journal, more than 40 percent of the 30.7 million people who own small businesses are 55 and older, and the majority of them have poured their savings into their shops and companies. And Project Equity estimates that more than 85 percent of business owners do not have a succession plan in place.
COVID-19 has pushed the succession planning discussions to the fore. With so many business owners nearing retirement age, what happens when they’re banking on a once-profitable business as their nest egg or a legacy for their children? In larger companies, CEOs are under pressure to cede control to people who can reinvent and reshape their companies in a post-COVID world.
This study by Deloitte, published in 2018, is strikingly relevant in our current environment. The authors argue that succession planning is best accomplished by combining data-driven decisions with an approach that recognizes the importance of human behavior in succession. As they write: “More often than not, we found that companies were either avoiding succession planning altogether or were taking a dispassionate, process-oriented approach that minimizes, or even ignores, the very real impact that it has on the people involved.”
Their findings include the statistic that while 86 percent of leaders believe succession planning is an “urgent” or “important” priority, only 14 percent believe they do it well.
The cumulative findings in the report suggest a way that banks could play an important role in sparking and facilitating a dialogue about succession planning. And that outreach involves the marketer. Talking about succession planning isn’t about giving up, giving in or giving away. It’s about preservation and protection — helping owners and executives leave a mark that lasts far beyond the day they leave the business.
Read the full study from Deloitte.