Sobering Succession Planning Advice

This post is inspired by the news that Warren Buffet stepped down and named his 71-year-old son his successor.

Succession planning is 100% part of business continuity. It doesn't matter what is going on - a sale, a retirement, a death, a vacation, a leave of absence - the business still needs to carry on without the leader. Part of a proper plan is getting the processes in place and training the staff on them. Another is selecting and picking an heir. The former is easy. The latter gets screwed up all the time.

I have encountered a lot of family-run businesses. They love to pick their family members as their successor...not considering if they like each other and travel together, both the primary and back-up could get wiped out in one tragic event. I've also seen very large corporations really blow it in spectacular fashion by doing it all wrong; Disney and Bob Iger are a case study for what not to do...and they still haven't fixed the problem (hint: it's Bob Iger's ego).

But let's examine the choice of an heir to the company, which does not have to be familial.

Warren Buffet is 92. He just stepped down. You can joke about Congress and the Senate having people stay way too long after their expiration date, but how is this (or News Corp) any different? When you look at your business in 10 years, what does the person look like who is running it (because it might not be you depending on how old you are/your personal life aspirations)? When you think about the age, do you want an octogenarian running your business? Do you want a mid-40 year old who will be able to grow the business beyond you?

The problem with Bob Iger (and potentially Buffet) is he wanted his hand-selected carbon copy to run Disney...while he stayed on as a board member so he can still be in control. He actively re-inserted himself and fired his heir. Buffet's son is 71. People, let alone septuagenarians, die all the time. Is there a back-up to this back-up? Was it intended to be a short-term 5-10 year plan (again, something on shaky ground if we're starting at 71) so Warren can take more vacations sooner before a proper heir is named, one who has a runway and legs to lead the business for more than 5-10 years?

A staggered succession plan is absolutely acceptable. Having a back-up to your back-up is not only advised but also very smart: the anointed may die (people of any age die all the time), have a life altering event happen (an illness) or just decide no, they've had enough. They are allowed to leave.

Here's the secret: you get day-to-day operations on lock down, succession planning is starting off the race with a 30 second headstart. Succession planning is not just for the long-term future of the company, it's for any time when the leader is absent for any amount of time. There are other specific things to make the continuation of your business possible without you there. Reach out and I'll tell you what.

I'll also tell you that planning for the leader to be gone or change is part of succession planning. The other part is making sure you still have a business for someone to lead.