The Fundamental Elements of a Successful Succession

Succession Planning
Succession Planning

Many advisors believe your most important action with regard to succession is finding the right person to take the reins of your practice from you when you decide the time is right to walk away or an unplanned incident like death or disability occurs. Although I acknowledge the importance of the individual tasked with the care and feeding of your practice after you leave, I believe that’s just one of the four fundamental human elements that are critical to the long-term viability of “your baby.”

  • An agile advisor. It’s hard to think about leaving something you’ve worked so hard to build up, but to ensure a successful transition, you must demonstrate a willingness to modify your thinking in a fresh, powerful direction and embrace new behaviors. Unfortunately, the biggest obstacle to a smooth succession is usually the person who’s stepping away. You must banish what I call transition terrors by acknowledging your role in the process as well as making a concrete plan and sticking to it.
  • Committed team members. If you operate your practice in a way that makes you indispensible to it, its value will be lessened in your absence. It’s far better to empower your key employees to play an important role in the practice’s success, and then motivate them via emotional and financial incentives to remain after you leave. They will be invaluable with respect to helping your successor through the transition and on an ongoing basis.
  • A stellar successor. Yes, identifying, assessing and retaining your successor is of critical importance, whether that individual comes from within the practice or outside it. In either case, I suggest assessing candidates’ values, personal characteristics, strengths and fit with the culture of your practice. Formal assessments like MBTI as well as structured behavioral interviews may help you through this process. It can’t be understated that you must choose wisely.
  • Client advocates. Would you have a practice without clients? Of course not, so it’s important to bring them into the transition process to help ensure sustainability. Once you’ve selected your successor, introduce that person to your clients with the aim of building their confidence in his or her ability to provide the same high level of service they’re accustomed to receiving from you.

Throughout your career, it’s likely you’ve authored any number of plans, both for yourself and your clients. Think of your succession plan as one of the most critical, as it will go a long way toward determining whether your practice survives once you have left. In an ideal situation, you should select your successor and bring that person into the practice five years before you plan to step down; this gives your team and your clients plenty of time to become familiar with the “new you,” provides the chance for you to gain confidence in your choice, and supports a seamless transition.