One of the biggest challenges in running a family-owned business is ensuring its smooth transition to the next generation. Many business owners assume that a single successor will take over their role seamlessly. But let’s be honest—your successor may not be as hardworking or as driven as you.
Why You Need Three Successors, Not One
When planning succession, I always advise my clients: Identify three potential successors. Groom all three, then choose one.
Why three? Because leadership in a business isn’t just about replacing one person with another—it’s about dividing responsibilities. Think about it:
- You need a CEO to drive vision and strategy.
- A COO to handle operations and execution.
- A CFO to manage finances and risk.
No single person can do it all. Even you, as a business owner, rely on multiple people to manage different aspects of the business.
The Burden of Leadership
When a person passes away, how many people carry the body? Four.
What does that tell us? The weight of one person’s absence is so significant that it takes multiple people to carry the burden. The same applies to a business. When the founder is gone, the responsibility must be shared. Otherwise, the entire system collapses.
Skipping a Generation
One of the hardest truths in succession planning is that some successors die as princes, not as kings. Longevity plays a crucial role—sometimes, an heir may never fully take charge because the previous generation holds on for too long. That’s why a business must have a plan in place for who has the power to review and adapt the succession plan.
What Makes You Successful?
Your success didn’t come from doing everything alone—it came from building a strong team. Your successor should bring complementary skills, not necessarily be an exact copy of you. In fact, they may not even come from your industry. The key is to find someone who can lead, adapt, and grow the business.
A Simple Truth: A Successful Business Attracts a Successor
Many business owners worry about finding the right successor. But here’s something to think about: If your business is successful, finding a successor is easy. No one wants to inherit a struggling company. Your job is to build a business that people want to lead.
So, as you think about your succession plan, ask yourself:
- Who are the three people I am grooming?
- Am I dividing leadership roles effectively?
- Is my business attractive enough for a capable successor to take over?
Business succession isn’t just about choosing an heir—it’s about creating a structure that ensures longevity, stability, and growth. Think about it.
