Are you a lawyer?

When people ask me what I do, I tell people that I work with business families and support them for strategy and succession planning. Then 9 out of 10 people typically say, “You must be a lawyer.”

People associate succession planning with estate planning or writing a will or a legal action. There is a legal aspect to succession planning. Whatever we plan, it has to be documented to have enforceable power. However, the legal aspect is the final stage and is less than 10% of succession planning.

The first step of succession planning, whether it is for a business or a family, is getting the key members together and figuring out “what do we want?” It is a simple question, but it does not have a simple answer. Often different family members have different ideas. Even when they have the same idea, their interpretation of the same idea can be very different. It takes a lot of open discussions, and well-structured and managed dialogues to bring out everyone’s best ideas and consolidate them into a group idea ensuring that every idea is attentively heard and carefully examined.

The second step is figuring out the “how” in succession planning. This step is where many families get stuck. If figuring out “what do we want” takes a day, it takes at least three days to figure out the “how”. There are so many ways to get to Rome, but based on our resources and constraints, our options are limited. Very often the most important resource and constraint is people. What capabilities and capacity does my family have as a group? What capabilities and capacity does each and everyone have that can contribute to our goals?

The third step of succession planning is developing and securing resources. Now that we know what to do and how to do it, we need to get all of the resources ready including people. Do our people have the capabilities needed to execute our plan? If not, how can we develop them and how long would it take? Do we have the capacity to implement the new plan? If not, how do we increase our capacity? Do we hire more people, do we cut down on non-strategic activities, what do we need to do?

The fourth step is monitoring progress and reviewing, which feeds back into the first step. Then the cycle continues.

As you can see, the most important process is getting family members together at regular intervals and having open, constructive discussions. Writing a legal document or financial planning is a minor portion of succession planning. We work with business families to facilitate the dialogue and constructive process to manage the succession planning, which is often a delicate and sensitive process.