In business, handing over your role is a key imperative to growth and wealth creation.
It means the transfer of responsibility of parts or all the business from yourself to another person or team.
Listen to Pavlo Phitidis outline which kinds of businesses are particularly affected by succession issues, and how to get it right, in this podcast from The Money Show:
Success in succession is needed in many cases. Some include:
Succession is common in family businesses and the professional services businesses.
In family, its all about the founders handing over to the successors. Globally, families only get this right 27% of the time. It’s often fraught by poor planning and communication.
In private business it’s a little easier if the company is well established and succession is an industry norm, for example partners in architectural firms, accounting practices or legal firms.
The considerations to get right include:
Most failures in succession are because the planning and process has been left until it’s too late. The cost of failure is significant since it prevents the founder from monetising their years of investment and risk through a capital exit.