Hank owned a mid-sized stone manufacturing plant in Dallas, Texas. His firm put some of the finest stone into top-of-the-line homes throughout the Dallas metroplex area, processing several hundred square feet of finished products daily. His plant was running three shifts, he employed about 150 men and women in sales, marketing, management, administration, and technical positions, and they were doing about $20M in sales per year. But when he suffered a massive heart attack on the shop floor and could no longer work, the business had to close.
Hank did not have a succession plan. No one was being mentored to be Hank’s No. 2 when Hank fell ill. There was no board of advisors for Hank’s wife to turn to when critical decisions had to be made about the business. Ultimately, it was easier and less risky to wind down the company rather than continue to operate or even sell it. This lack of planning had a significant impact on Hank’s family and the 150 families that relied on the business for employment. With just a little forethought, he could have provided for his family and employees by identifying key positions within the company, assessing potential internal candidates, and developing plans to prepare them to take on those roles when he was ready to leave or a triggering event occurred, ensuring smooth transitions and business continuity.
Succession planning does not happen by accident. It does not happen by coincidence. It is an intentional act of planning that starts long before it is needed. Many often overlook succession planning, thinking there will be time for it later. JACO is committed to ensuring our clients understand that an early, multiple pathway-focused succession planning approach provides them with options and opportunities to make the most of their hard work and years of investment, relying on solid business principles, acumen, expertise, and experience.
From our experience with succession planning, we repeatedly hear several myths from clients about why they do not need to consider this integral step in their business plan. Here are our thoughts on those myths.
Myth No. 1—You’ve got time
Actually, you don’t. It is essential to start early to identify succession planning pathways. This structured process identifies, develops, and prepares high-potential employees to fill critical leadership roles when current occupants retire, leave, or don’t develop as anticipated. Proactively building a talent pipeline for critical positions ensures you have options to achieve business continuity.
Having a documented succession plan as early as possible will allow your business to adapt to a triggering event—a specific occurrence like death, retirement, disability, etc. A triggering event initiates the process of transferring ownership or leadership responsibilities within a business, prompting the implementation of the succession plan. Without a plan in place, like with Hank’s business, your company’s survival is at risk.
Myth No. 2—Succession planning is a one-time event
Nothing could be further from the truth. Succession planning is not a one-and-done exercise. Instead, it is an evolving process that should be reviewed annually as a part of your strategic and business planning process. Regularly revisiting and updating succession plans based on current and future business needs will ensure that you have prepared your leadership team for whatever comes their way.
Myth No. 3—Succession planning is only for transitions in ownership
Think again. While developing multiple pathways to consider as options for ownership transition is essential, the same thought process should be used to create plans for successor leadership candidates for positions throughout your organization. Succession planning provides ample opportunity for identifying critical and specialized roles at all levels of business and preparing potential successors throughout the organization. It is also an excellent tool for employee retention, development, and knowledge transfer.
Myth No. 4—Succession planning is only for large companies
Succession planning isn’t just for industry giants; it’s essential for companies of all sizes and industries. While large corporations often have detailed plans embedded in their culture and documented in employee manuals to ensure seamless transitions, smaller businesses frequently face abrupt and emotionally charged leadership changes without a clear plan in place, making critical decisions even harder. The good news is that succession planning doesn’t need to be complex or expensive; it simply needs to be thoughtful, well-documented, and adaptable. As your business evolves, your succession plan should grow with it, scaling in complexity to meet your company’s changing needs and ensure smoother transitions, regardless of size.
Plan today for a successful tomorrow
Every business owner or leader should consider succession planning as part of their regular strategic planning. Who in the organization shows potential for development? Who has acumen for the business? Who comes to the table with problems AND solutions? Who asks why? Where are the holes in your organization? Strengths? Weaknesses?
As part of your planning, think about your current team and who might be able to grow into essential roles with training, coaching, further education, or on-the-job training. Are there roles that need to be filled from the outside? Write it down. Make your plan. Consult with your team. Strategize the next five, 10, 15, and 20 years to ensure continuity and growth for the business and its employees.
Starting your succession planning now will provide you with more options and increase your chances of success if an unexpected triggering event occurs, ensuring longevity in the marketplace. Get started with JACO today to secure the future of your business.
About Jeff
Jeff has over 25 years of strategic planning, business development, and business transformation leadership experience. Having worked with mid-market, closely-held and family-owned businesses his entire career Jeff has a unique understanding of how these enterprises operate and the challenges they face.
He is passionate about working with business leaders to build strong cultures while developing and executing strategies that deliver exceptional results that benefit all the company’s stakeholders. Jeff’s hands-on approach to working with companies begins with a commonsense approach to strategy development.
With extensive experience in organizational turnaround and growth Jeff follows a defined process (disciplined, focused, intentional) to guide clients from strategy to execution. His experience covers a multitude of industries, with an in-depth understanding of automotive manufacturing.
Jeff holds a Master’s in Business Administration from the Capital University School of Management and earned a Bachelor of Arts in Business Administration and Management from Ohio Dominican University.
