You may have heard the words “Succession Planning” from your estate planning attorney, CPA, or investment advisor, but nobody really explained what it is or why it’s important. 

Succession planning involves transitioning from current ownership, leadership, and management (aka “gray-hairs”) to new ownership, leadership, and management (aka “newbies”). The transitioning of talent, experience, and customer relationships can be daunting.  Without proper planning, the “best laid plans” will collapse at the first sign of trouble as the newbies scramble to satisfy customers, troubleshoot never-before-seen problems, and adapt to change.

Customer Problems

Customers are the #1 problem of transitioning from old to new.  Customer relationships are built over years of experience and shoulder to shoulder battlefields.  Like comrades in arms, the company-customer relationship has been forged together by tactical pricing strategies, volume demands, seasonal expectations, and competitive bidding processes, to name a few.  Customers will demand the same experience with the newbies.  The process of transitioning should start well ahead of the ultimate transition date.  This can be done by:

  • Bringing the newbies in on all customer meetings.
  • Allowing the newbies to troubleshoot and problem-solve with the gray-hairs looking over their shoulder. Newbie success will demonstrate to customers that the ship won’t sink when they take over.
  • Allowing the newbies to invite key customer contacts to social events without the gray-hairs feeling threatened. Remember that customers have succession planning issues too and may be bringing in newbies as well.  This is a good time for all newbies to get together and form bonds.


Nobody wants to hear that they will soon be out of a job, no matter what the age.  For highly successful and driven individuals, retirement is NOT appetizing.  Many gray-hairs (especially owners) allow their ego to get in the way during the transition period saying, “Nobody can do my job as well as I can.”, or “This company won’t last a day without me!”  This is one of the most difficult scenarios to overcome!  Emotions can have the single most destructive impact on the transition process.  Emotions can be managed by:

  • Confronting up-front the fact that emotions will exist during the process. Everybody knows the personalities of the gray-hairs, so no surprises there.  Simply address them and set boundaries (eg. No yelling, name calling, down-grading, or belittling!).  However, for newbies, personalities may be more difficult to address without a long period of time together.  Require the newbies to take a personality test and have a qualified professional conduct a team-building session involving the gray-hairs and the newbies.  Nothing works better to break down barriers than climbing 10-foot walls and running through fire together!
  • Establishing rules of engagement by identifying the possible emotional and confrontational scenarios in advance of the transition and defining how they will be handled (eg. Walking out of the room to catch a breather and calm down).
  • Discussing whether the emotions may be so extreme as to guarantee an unsuccessful transition. This is often the case between family members such as parents and children.  The old adage, “Nobody can hurt you like family.” weighs heavy on the transition process.  If the past is just too great to overcome, consider using mediators, business coaches, or other trained professionals to assist and manage the transition process.  Using outsiders can have its own set of challenges, but it may just be the only way to transfer product knowledge, customer lists, and other important information necessary for the newbies to carry the company forward.