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Dec 2, 2021

Hear the important steps a business owner or executives should consider during succession planning and leadership transitions from Matthew Kerzner, Ph.D.,  a managing director in the Center for Individual and Organizational Performance (CIOP).


Matthew Kerzner: I'm here to talk to you about the succession and transition planning process. Here in the center, we have a six step process that we can help you put a plan together for your succession.

The first step is what's called the transition and exit strategy. This is putting your timeline of events together of what you need to do in order to get ready for your exit strategy. What is your exit strategy by the way? How long do you want to work? Do you have people identified that can take over? Do you have people internally or do you need to go externally? So what is that transition and exit plan strategy that you have for yourself?

The second step in this process is governance. And what we like to look at is three major areas of putting governance together. One, your family. What are the rules and regulations of having a family? Do you need to have a family council together? Do you need to figure out the next generation and what are the rules in order for them to be successful within the business? The other area of governance is the actual ownership governance. If you are now passing this down to your children, how are they going to play in the sandbox together? Very important to figure those things out. And the last one is, those non-family leadership people that are within your organization. How are they going to work when you're not there? That's all about governance.

The third step is what we call growth and value enhancement. Are you ready to retire? Do you have enough money saved for your retirement? One of the stats that we like to share is that an average business owner only has about $40,000 saved for their retirement. So it's very important that you take a look at what you need to start putting money away, to have the lifestyle that you deserve. But also if you're looking to sell your business as part of your succession or transition is the value of your business there? When was the last time you had a professional take a look at the valuation of your business? Very important.

The next step is what we call execution and accountability. How are you going to hold yourself accountable to make sure that this plan comes alive? How are you going to execute it? What's the timeline of events here? Putting a plan together is extremely important and this step is where we dive really deep into it. The fifth step in this process is looking at your bench. Those people that work for you today. Who's ready today? Who's ready in three years and who will be ready in five years to take over? Not just for your position, but any key position that you need to put a succession plan in place for. What are their current skill sets and what future skill sets do they need and what are those gaps that we need to work on? That's what we mean by leadership development.

And the last step is the succession plan and succession execution. And that is making this plan come alive. It's sticking to the timeline of events, all the deliverables that are needed in a succession plan process, and here at EisnerAmper, we can help you put this plan together.

Transcribed by

RISE (Real Ideas to Stimulate Engagement) - Q1 2022

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