Why succession planning is crucial for your firm’s future

July 31, 2019

By Kreston CEO, Liza Robbins.

‘I should have started sooner’…

We’ve all felt that regret.

When you assess risk for your clients, you highlight the consequences of inaction, so your clients start taking action today.

Even so, too few firms actually set the time aside to purposefully consider their own future… until it’s too late.

When you look to the future of your company in 10 or 15 years, what does it look like?

How many of your existing partners are still in place? Who’s at the top?

If it is a family firm which you own, who’s going to be at the head?

Chances are that some people will be retiring or leaving – perhaps even you.

Your firm must have plans in place for new leaders to take over the reins… and this takes a lot of planning and forethought.

No matter the size of your firm, succession planning is a challenge.

From methodically identifying and training up new leaders, to transitioning client relationships, and managing both the process and emotions of change in the firm…

…it’s a big and important job.

And it’s not one that should be left to the last minute.

At least not if you plan on the transition being a success.

You can’t just announce your retirement to your colleagues and clients out of the blue.

That would be a disaster, because sadly, the troops wouldn’t automatically line up to keep things going.

It can take years to train new leadership to take over.

Not only do you have to identify the right people, they will need a lot of help preparing to stand at the head of a successful firm, no matter how much natural talent they have.

Your clients will need a lot of preparation too.

If their primary relationship is with you, they’ll need to become comfortable and trust someone else, and that can take a long time.

And if they see or feel chaos or confusion, they will simply leave and find a firm they trust more.

I’m sure you’ve heard of firms that were forced to close their doors soon after the managing partner stepped down, because client relationships broke down and no one capable had been groomed to take over.

I’ve certainly seen firms that struggled badly, having to close down departments and slim down their services, because their senior partners were winding down, and they just hadn’t trained up staff to take their place.

If you’ve put your heart and soul into building up your firm, it can be devastating to watch it fall apart like that.

Sadly, it happens all the time. Usually for one of two reasons.

Firms don’t understand how to put a solid succession plan in place….

…or, they simply don’t make it a priority.

For your firm to continue growing, evolving and existing, a clear succession plan must be part of your overall strategy, starting today, if it isn’t already.

One of the biggest costs, when you don’t do this, is that it makes it very difficult for you to retire.

A solid plan allows you to mark a realistic leaving date in the calendar and methodically start the handover process.

My next series of emails will show you how to manage your succession plan professionally.

You’ll know what pitfalls to watch out for, and how to make the transition from one leader to another a smooth one…

… so that your succession plan isn’t an accident or last minute panic move, but a deliberate strategy that ensures the future success of your firm.

Watch out for those emails.

But before I go I’d love to know:

Do you have a succession plan in place? If so, how well does it work?

If not, what are your challenges with succession planning?

Hit ‘reply’ and let me know.