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October 19, 2021
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Why it matters?

Succession of a business is fraught with emotional and practical challenges, whether in family businesses or across the professional services sector. Success is rare, with 73% of succession attempts failing at a significant cost to the founders, successors, employees, customers, and suppliers.

For family businesses, failure costs both generations the family’s wealth-generating and emotional wellbeing. In private companies, it erodes or stalls the retirement wellbeing of the exiting generation and robs the next generation of their future wealth creation path. All lose.

What goes wrong?

  • Mindsets – The exiting generation has an eye on retirement and their final wealth generation through a sale of shares. Successors look to carve a wealth creation path in the years ahead through reinvestment. The conflict, conscious or not, seeds the frustration experienced by both the timing and method of succession. The different mindsets prevent effective planning or erode trust and the relationship increasing the complexity, judgment, and probability of succession success.
  • Relationships – poor timing, planning, and method in succession create confusion and noise in the business ecosystem. Customer and supplier uncertainty creates doubt and fear, often stalling or changing tac on the succession process and its timing, costing the parties and the company.
  • Value – Neither party has likely valued a company before, and conflicting agendas further impede successful succession. The exiting generation needs to maximize their value as their last wealth-generating act before retirement. The succeeding generation needs certainty that they can afford the acquisition.
  • Timing – the fear of exiting a business by the founding generation is often realized late in the process. Questions on their value and psychology begin to arise, and fear often shows as a reticence to proceed, which the succeeding generation may misconstrue. Once resolved, the timing issues center on the transfer and payment of the shares. The succeeding generation typically requires payment terms, having had no prior opportunity to accumulate capital to acquire the shares. This creates uncertainty and apprehension in the exiting generation who relinquish control, without full payment, that could see their successors erode the value of their yet-to-be-paid-out retirement.
  • Transparency and plan – decisions on successors, the process adopted for the transfer of responsibilities, and the final value and terms of succession can harm the relationships across the company. Good, loyal, capable employees are overlooked because of poorly motivated decisions or poorly planned communications, causing animosity and anxiety through the succession attempt.


If you’re exiting, your successors will pay you out over time, and you need to be confident that they can operate, run and grow the business without your input. Should they raise capital to acquire their shares, they’d need to meet the requirements of a funding source.

We work with you to develop a structured succession plan that is practical and measurable to

  • Transfer operational and commercial responsibility, over time to successors

Working with you and your leadership team or family members to:

  • Align leadership – run diagnostics to ground-truth and align the understanding of the companies foundation, future growth strategy, team dynamics, and current numbers
  • Set the future goals together – 10, crisply defined, measurable growth goals, and load them onto your company dashboard. Monthly we will evaluate progress towards the goals to ensure their achievement and the structured transfer of responsibilities between the generations
  • Create a schedule of activities over time to transfer the responsibility of the business functions in a structured, methodical manner that draws on the experience, insight, and learnings of the exiting generations alongside the activation and implementation of the activities, incorporating the wisdom to build out the future business
  • Transfer leadership and relations across customers, suppliers, and employees between generations to manage relationship expectations and maintain stability
  • Set up and establish a monthly, performance-based engagement between the generations to the sign-off transfer of blocks of responsibility and set the post-handover relationship between the generations with the exiting generation assuming a shareholding-investor-advisor role and succeeding generation taking an owner-operator-leader role
  • Collecting data across all the systems to support decision-making to moderate decisions, align the parties, ensure objective engagements
  • Build a valuation framework that aligns both generations on the fair value of the business for eventual acquisition and sale of shares to reward the exiting generation and motivate the succeeding generation

The Outcome

An inclusive, structured, time-based engagement to reliably handover in a risk-managed process, the responsibilities of the business operations and strategy, align the expectations between the exiting and succeeding generation on the company’s future direction plus establishes the framework for the transfer of responsibilities while ensuring facilitated communications, the use of data to moderate and guide decisions and the development of respect between the generations. Allows for the alignment on valuation, terms of payment, conditions of handover to preserve the wealth payout for the exiting and wealth creation path for the succeeding.

How we make it happen

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