CEO Transition

In his recent article published with Acropolis Investments, Dan Bean, CMA Partner, provides five key steps to successful preparation for the transfer of leadership in family businesses. In this blog entry, we will discuss Step 3: CEO Transition:

[note color=”#B6D6F0″]

Leadership transition is most effective if designed as passing many small batons rather than one large one. The sequence of the batons passed should be a function of the strengths and developmental needs of the successor.

[/note]

Having and implementing strong assessment results from Step 1, this should make identifying the most important strengths and development needs for the successor a less stressful process. The National Federation for Independent Businesses (NFIB) also supports Dan’s idea of passing many small batons by using mentoring to gradually transition responsibilities.

[note color=”#B6D6F0″]

Mentor the next leader. Just because your daughter has led the sales team for 10 years doesn’t make her ready to manage the entire operation. Owners should prepare successors over several years by letting them work in different areas of the company, introducing them to important business contacts, involving them in key business decisions and gradually relinquishing responsibilities to them.

[/note]

For the NFIB’s 5 other steps for family business succession, please see their original post.