Don’t you Mean Continuity Planning?
One of the most popular topics in the area of family business is always succession planning. I’ve known this for a while, yet I rarely use that term in my writing, especially not in the headline.
So in order to prove that I can “zag” as well as I can “zig”, I did it this week. Why the change?
I’ve just spent several weeks refreshing my website, and my “web guy”, who is really good at what he does, told me that I needed to write about succession planning, because that’s what a LOT of people are searching for.
When I explained that there’s a better term that people like me now use, “Continuity Planning”, he patiently nodded his head and reminded me that if people are searching for one thing and you continue to call it something else, many of those people will never find you.
Alas, I acquiesced.
It kind of feels like I went back to build a worse mouse trap, hoping that the world would now beat a path to my website. I guess we’ll soon see if new folks find me.
So You Want to ACE It
So in the spirit of writing something newish, catchy, and useful about family business succession planning, I decided to share a mnemonic way of thinking about it.
A few months ago, in Family Engagement and Family Alignment – Chicken and Egg I shared the idea that engagement and alignment were two sides of the same coin, and two of the most important aspects of getting a family’s planning and governance on track.
Since engagement starts with an “E” and alignment starts with an “A”, I knew I had the makings of something. A good mnemonic should be something that spells a short word, so vowels carry a premium.
I just needed the right consonant to hold everything together.
Clarity to the Rescue
After kicking around a number of other options, I finally settled on “clarity” to complete my catchy word, “ACE”.
I was tempted to use “communication”, which would have given me the same word, and communication is, of course, crucial to family business success over generations.
But bringing things right back to the “succession planning” angle I was going for, I thought that clarity was a better word.
So let’s look at how this ACE holds together.
Does the Order Matter?
What I’m hoping people take away from this post is that family business succession planning can be a success IF you concentrate on the three items in the ACE mnemonic: Alignment, Clarity, and Engagement. That’s it.
Now, are they in the right order?
No. Or Yes. I’ll settle for a hard Maybe.
Does it matter? Definitely not.
Succession planning is not an event, it’s a process. And because it is a complex process, it’s definitely NOT linear.
You don’t do “Step 1” and then “Step 2”, etc.
It’s NOT an Estate Plan
Some people may want to argue this, and I think that most of those folks are probably confusing family business succession planning with a related process, that of estate planning.
Estate planning is a specific subset of succession planning, and it can certainly be much more of a “linear” operation.
When we talk about family business succession planning, there’s a LOT more at stake, and it MUST involve those who will be expected to play future roles.
Engaging and Aligning, with Clarity
Whereas an estate plan is mostly about who’ll be the legal owners of specific assets after their current owner passes away, a succession plan is more about who will do what.
It’s about how a group of people will interact and decide things together, for the common good of the whole family.
That means that these people need to be aligned in their thinking. They also need to have a common and clear understanding of everything that’s at stake.
This stuff definitely doesn’t just happen by itself, which is why you also need to have everyone engage in the process.
Incremental Iterations Work Best
You need to constantly go from engaging to aligning, and back again, while making sure to always strive for more clarity.
This happens over time, as the family members learn to work together and understand that they are interdependent.
Small gains add up over time, and incremental is a good word to keep in mind.
Keep at this over time, and you will ACE it.