Succession in Family Dominated Companies: the KISS approach.
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Transcript of Succession in Family Dominated Companies: the KISS approach.
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A “KISS” APPROACH TO SUCCESSION PLANNING.
Larry StybelSTYBEL PEABODY ASSOC. INC.
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MY GREATEST FAILURE
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THE KISS APROACH TO SUCCESSION PLANNING.
• The danger of Important/Not Urgent Business Issues and what you can do about it.
• Succession planning starts at the top: the KISS approach at the ownership level.
• Moving down the organization to institutionalize smooth transitions.
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IDEAS TO ACTION WORKSHOP
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• Matthew Sonfeld et al. “Family Business and the Relationship Between Business Age and Management Activities, Styles, and Practices: a four country analysis.” SMALL BUSINESS INSTITUTE RESEARCH REVIEW, Volume 25, 2008.
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2006 U.S. Census
• 35% of Fortune 500 Companies.• 80% of the 15 million U.S. businesses.• 50% of U.S. GNP.• 50% of U.S. employment.
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SONFIELD STUDY: YEARS IN BUSINESS AND SUCCESSION PLANS.
• USA• France• Croatia• India
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THEY ALL SUCK
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88% believe business will be in family in five years……….
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12% survive from the second to the third generation.
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3% survive from the 3rd to the 4th Generation.
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WHY SHOULD YOU CARE?
• Control Today.• Predict Tomorrow.
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YOU CAN GET AS COMPLEX AS YOU CAN AFFORD……448 pages
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• Bring a “real” outsider to your Board with a mandate of holding your feet to the fire in making succession Important AND Urgent.
• If you are a family business, do not put the burden onto your family, friends, or business people who depend on you for revenue.
• Hire someone five years before you think you need to do it.
• Schedule one hour a year of Board meeting to discuss succession issues.
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Good Actions Trump Good Intentions.
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Policy #1: No Promotion Possible Unless Incumbent Identifies and Develops Replacement.
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1. Incumbent has identified successor.
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2. Incumbent is Developing Successor.
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Money Rocks!!
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Spend More Time Cultivating High Potentials on Your Team.
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KISS Approach to Succession.
• Failure to plan means someone else decides….• Succession can move from important/not
urgent to important/urgent.• Starts from the top of the company.• To institutionalize, change your compensation
system and evaluation system.
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