Integrity Matters
May 26, 2004

Have a plan when it’s time to pass firm on

Question: (E-118)

Dear Jim:

It is time for me to pass the senior management role of my company to a high-potential colleague. She has been with me for 20 years, doing a good job. I like and trust her and have confidence that she will take the new position seriously. Her integrity is not in question. But my concern is this: How can I minimize the risk of either disruption to long-term business relationships or loss of revenue when she takes over the firm?


Giving up control in larger corporations is generally a structured process, often related to age or financial success. At age 62 or 65, the boss is required to retire. Boards of directors identify the successor, and the new regime is introduced. In circumstances where performance is less than stellar, this process can happen precipitously. Sometimes dramatic decisions by boards, driven by noisy investors, can have the appearance of an axe-wielding gorilla. Even so, the formula for transition must be clear. Private companies, however, may have various plans for succession and sometimes no plan at all.

In closely held organizations, including family firms, the process can get mixed up with interpersonal connections, marriage, stock ownership and a whole host of emotional issues. Sometimes performance runs a distant second to other relationship dimensions. Even so, for the stakeholders (employees, suppliers and certainly customers), the issues are always about productivity and consistency in standards (even if the heir-apparent did marry the boss’s son or daughter). Successful succession is about the economic viability of the institution and it is driven by effective teams which are to be guided by competent leaders – by whatever route they took to reach the top.

The fact that you have worked closely and confidently with your likely successor is important. But there are other issues to consider. Below are six questions for which you need clear and positive answers before any final succession decisions are made:

  1. Does the individual being considered understand, appreciate and accommodate the values you hold near and dear?
  2. Will this heir apparent treat your customers and clients in ways that are compatible with your operating style?
  3. Will your employees be reassured by this person’s behavior or be “jarred” by her conflicting patterns of communication, feedback and management disciplines?
  4. Are you confident in the accuracy of your assessment of her operational and leadership potential?
  5. What is your back-up plan in case the transition with her fails?
  6. Will a mistake in this transition jeopardize your reputation or your future?
    If your answers are not clear or positive to any of the above six questions, then it would be wise to seek “succession expertise” before turning over the keys to your economic future and reputation (and maybe even retirement nest egg).

Home Page | About Us | Ask Bracher | Services | Resources | Contact Us

©Bracher Center for Integrity in Leadership. All Rights Reserved.
1400 Munras Avenue ~ Monterey, California 93940