Securing Your Legacy: Protecting Your Business Through Succession Planning

Succession planning is often the farthest thing from a priority. Until it isn’t.

There is a too-familiar story of a successful business owner. It’s the story of a 60-year-old man who had founded and built a successful business in a suburb of Buffalo, from scratch. For the sake of this anecdote, let’s call him Jack.

Jack had spent decades pouring his heart and soul into growing his company. It had grown from him and his two friends working from well-worn secondhand couches in his basement apartment to over two hundred employees and three buildings that he personally owned and leased to the business. And he took great pride in knowing that he had built something that would last for generations to come.

But over the years, the thought started to creep into Jack’s mind that he had never actually given much thought to what would happen to his business after he retired. He’d always assumed that one of his children or trusted employees would take over and continue his legacy. 

As the hours he looked forward to each week began to shift from his time at his company to his leisure time on his boat with his grandsons, a painful realization slowly materialized. Jack began to grapple with the unsettling fact that he had been putting off the effort to ensure the company’s future beyond his retirement.

When Jack announced his pending retirement during a family trip to New England, he was shocked to discover that none of his children were interested in taking over the business. Their own families and careers were already their focus. And they had no desire to take on the responsibilities that came with running their father’s company.

To make matters worse, none of Jack's employees were equipped to take on a leadership role. 

He’d always expected their complete time and attention to be focused on their own roles. His expectations hadn’t allowed them the bandwidth to get involved in executive decision-making or strategy. Even if he had, Jack had held fast to these pieces of the business and hadn’t taken any of his direct reports under his wing. None of them had developed the skills needed to run the business as a whole.

As a result, when Jack’s desire and ability to maintain his 50-hour weeks began to decline - so did his once-thriving business. Long-time customers whose faith in the company was based on Jack’s presence were getting antsy about the future. 

When a key customer openly asked if they should be looking for another vendor, it lit a fire within Jack to shift all of the energy he was dedicating to running his business into figuring out how to let go of the reins and coach his direct reports. Knowing he didn’t have the vitality or the hours to do this alone, he sought outside help.


Of the two types of succession planning: executive leadership and operational continuity - also known as business sustainability - Jack’s example illustrates the precarious situation that can arise for a business that neglected one of the two. 

But his situation could easily have become the latter. The business’s operational dependency on Jack’s product knowledge presented its own problems.

In this article, we’ll discuss the threats posed by both types of succession planning, key considerations for approaching each, and how to ensure succession planning is carried out and objectively measured in a swift and sustainable manner.


Types of Succession Planning


Leadership Succession is the readiness of an organization to successfully transition from the current leadership to a new owner, chief executive, or leadership team. Sometimes this entails a change of who is at the wheel. Other times it may involve or require a change in the structure of the leadership itself. Both require care in planning, communication, and implementation to maintain the workforce’s emotional connection to the firm.

This article will cover the following steps:

  • Capturing What’s Not on Paper About Leadership
  • Employee Experience
  • Mapping the Seats
  • Understanding the Bench
  • Development Plans

Operational Continuity, sometimes known as business sustainability, is a firm’s objective self-awareness of the information it requires to function. Often, especially in organizations where the average tenure is high or lean philosophy prevails, a significant portion of the firm’s operating knowledge resides in the minds of key personnel. This can become a high-risk situation, leaving the business susceptible to disruption.

Though very similar to executive succession planning, operational continuity is a more systemic, process-driven approach:

  • Knowledge Mapping
  • Knowledge Transfer
  • Systemization

Leadership Succession Planning

Executive succession is one of the most critical moments in a business’s life cycle. It can make or break the long-term legacy of the business, the faith of customers, and the retention of key employees.

Starting With Why: Capturing Who the Leadership Truly Is

The greatest gift a leader can give their team is clarity. If your direct reports, children, or external candidates stand a chance of being successful in taking over your business in a way that does right by your customers, employees, and vision for the company’s future - you’ll have to spend time getting clear with yourself and your expectations for the role along several dimensions.

What kind of leader is successful at your company? And why is that? Consider more than the qualifications, experience, and skills that this person needs to have. What are the real day-to-day behaviors of leadership that have made the company successful? What is it that is most important to your employees? What do your customers value most about you? 

It’s critical to reach clarity for yourself on these points because you will need to be able to objectively articulate them to potential successors. And you will have to find ways to measure these aspects and the successor’s readiness level along each of them. 

It’s also a necessary exercise to ask which parts of the business depend on these things. In many cases, a smart, charismatic founder may be filling the roles of more than one person. You may have to ask yourself if it’s realistic to find one person to do everything you do. Is this role better off being split into two - or even three - leadership seats with clearly defined roles?

The Next Steps

Employee Experience

Best-in-class succession planning leverages a clear sense of what is truly most important to your people. Taking the time to assess the employee experience will allow you to make arrangements to protect these things during the transition - and give future leadership guideposts to double down on the right things. This is key for retaining and motivating your employees beyond the transition. 

Mapping the Seats

Succession doesn’t end with a swap of a chief executive or owner. Be sure to understand the skills, experience, confidence level, leadership abilities, and interpersonal dynamics of that individual’s reports. How those issues interplay before and after a transition will change the way the organization functions and front-line 
employees experience the day-to-day. In other words: small problems can become big problems if they’re not part of the plan.

Understanding the Bench

The capstone issue. Make or buy? Is there potential inside your organization that will be ready for the role(s) by the time succession needs to occur? This is not simply a question of ability. There are three key dimensions here. We refer to this as GWC. Do they get it? Do they want it? (for the right, sustainable reasons) Last and perhaps least importantly, do they have the capacity to do it? The first two must be in place at the time you ask the questions. If the answer is no, then we must search outside.

Development Plans

Whether our successor is internal or external, this stage involves mapping the route from the current state to our desired state. This should be inclusive of the other important seats we identified above. The Readiness Score is how we will measure objective progress along that route.


Operational Continuity

The brilliant chief engineer that we rely on to troubleshoot quality issues. The longtime sales VP who has all the important client relationships. The attending surgeon is responsible for our best-in-class patient outcomes. The master machinist who keeps incredibly complex equipment up and running. The finance manager whose whole process is in her head…

These are the types of product, equipment, process, and historical institutional knowledge bases that can place one’s business outputs at risk to disruption. If knowledge is concentrated in someone’s mind and is not properly disseminated and accessible within an organization’s information infrastructure, it can grind things to an immediate halt if that person’s head is suddenly less accessible for any number of reasons. 

Even something as simple as a vacation day can become implausible in the instances above - which can lead to burnout and turnover. These are good examples of the more permanent forms of removing the company’s access to knowledge. And more pleasant to think about than the allegorical “hit by a bus.”

The upside is there is a simple (straightforward, not easy or quick) process to apply to prevent this from impacting your business. Here are the steps:

Knowledge Mapping is the deceptively simple process of capturing what actually 
happens in your business processes. And documenting those processes in standard 
operating procedures. 

Knowledge Transfer is the act of taking what is currently in key people’s heads and 
getting it into another - generally more junior - person’s head.

Systemization occurs when the knowledge transfer process is formalized and 
memorialized in an accessible manner - and is no longer dependent on facetime 
between the current top knowledge holder and the individual they are transferring it to. The most common way to do this today is by housing institutional knowledge in a 
Learning Management System or LMS software. Somewhere openly accessible, easily 
searchable, and structured for self-service learning.

The Readiness Score in an operational continuity scenario is the measurement of 
where we are on the scale between the high-risk situation of key business knowledge or processes being entirely in the minds of key personnel - and the complete systemization of knowledge within the organization.

Be Realistic About Your Timeframe, and Everything Else

Having a clear and realistic timeframe is an important part of ensuring succession planning doesn’t get “back burner-ed” to shorter-term priorities. And it’s critical to understand what needs to happen when during the two above processes.


Be Clear With Your Team

Early on in the process communicate to all direct stakeholders that you’re engaging in this process and what it will entail. The point when this should occur is as soon as you’ve been able to map out the above for yourself

Be clear with your direct reports and any other stakeholders in the organization about which roles will be affected by the process and what to expect as you develop the plan. Be as narrow in scope but specific in detail as you can at this point as to what the outcomes are that you’re aiming for. Communicate the reasoning motivating the initiative in a straightforward and honest manner. 

Often owners or leaders will assume that taking a “less is more” approach to communication will prevent employees from worrying. Quite the opposite is true. The absence of earnest and authentic conversation around this topic creates an information vacuum that will soon be filled with imaginative and often damaging stories.

Even in a business continuity scenario - it’s important to communicate with your team. It’s easy for some key employees to get nervous that their knowledge is being captured so that their position can be eliminated or downgraded. Up-front communication about the motivation for this process is key to preventing imaginations from running wild.

If you struggle with the answers to these questions or feel you might be guessing, it may be time to ask these questions of those groups through customer or employee experience assessments. 

If you don’t feel like you’d get a straight answer or wouldn’t know where to start, you may want to have an outside, objective party ask them for you. It can also help to have an outside advisor interview you to assist with the mapping process to ensure a very accurate picture of the needs of the role.


If you're interested in learning more about Wayforward's succession planning services, please contact us for a consult. 

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