The Professional 50

The Pacific Northwest's Top Business Transition Professionals

The Cost of Inaction

The Cost of Inaction

Many owners (if not most) wait until they’re ready to retire before they get serious about the planning of a transition. That timeframe is usually about 6 months before they want to sell the business. And while it’s true that most deals can be completed within 6 months, getting a deal done and getting the price and terms you want can be very different things.

There’s a cost to waiting until the last minute to plan an exit.

EXTERNAL SALES

Typically, when an owner plans to sell his or her company to an outside buyer, they’ve imagined a scenario where an advisor reviews their company, puts a value on it (which ends up being equal to what the owner feels it’s worth), and goes about finding a buyer. Once the buyer is found, they come in, look over the books and the operations, and write the owner a check for the value of the business in exchange for the keys.

But it rarely works like that…

More often, one or more issues related to price or terms surfaces and can even derail the plan.

Value Less Than Desired
When a formal valuation is done, sometimes the value is higher than expected, but often it is lower. Transition experts can help an owner increase the value of their company, but it takes time. Once changes are made and the improvements generate greater growth and profitability, that increased performance needs to be demonstrated for at least a year or more to properly boost the value of the business.

If an owner waits to address this, he or she will be forced to accept a lower value. There is a cost to inaction.

Actions to Take and The Benefits:
There are several steps an owner should take a year or more in advance of a sale to avoid surprises and to maximize value. A formal business valuation should be conducted to establish an unbiased value for the business. In addition, a preliminary Quality of Earnings evaluation and a Quality of Leadership assessment should be done to uncover any potential issues that could negatively impact value. Once the valuation, Quality of Earnings and Quality of Leadership are done, any shortcomings can then be addressed to mitigate problems and maximize value.

Price Less Than Desired
Generally, the price a buyer will pay for a company is close to the formal valuation figure. And that price is often a multiple of EBITDA. But as the wave of Boomer-owner retirements builds (it started in 2021), there will be a growing surplus of businesses on the market looking for a buyer. And with a growing surplus comes falling multiples. In other words, where the price might have been 6 times EBITDA, it may well drop to 4 times EBITDA.

If an owner waits too long to sell the company, he or she will be forced to accept a lower price due to the surplus of sellers on the market. There is a cost to inaction.

Actions to Take and The Benefits:
The Boomer owner retirement wave has begun (2021), the surplus of sellers over buyers will consistently increase over the next 3-4 years, and the surplus will persist for another 8-10 years after that. Given the dynamics of the marketplace, the best way to ensure a high multiple (and therefore a strong price), is to put an exit plan into action sooner than later.

Less Desirable Terms
Another consequence of a growing surplus of sellers, is that buyers can become more demanding and may require terms that an owner may find undesirable. They may demand a significant earn-out, where the owner must “earn” part of the purchase price based on the performance of the business following the acquisition. Or buyers may demand that the owner stay on for an extended period (1-3 years) to ensure performance. Or there may be any number of other demands that the owner may not like, which could be deal breakers.

If an owner waits too long to sell the company, he or she will be forced to accept additional terms because they’ve lost their leverage due to the surplus. There is a cost to inaction.

Actions to Take and The Benefits:
The same advice to maximize multiples holds true for deal terms. The sooner an owner acts, the more leverage he or she will have over the terms of the deal.

INTERNAL SALES

Just as with an external sale, an owner who plans on having a successor take over has also imagined a scenario. They imagine that when the time comes to retire, their chosen successor will be ready and willing to take the reins of the company and will successfully lead it into the future. The business will continue to grow, profits will continue to grow, employees will be happy, customers will be happy, and of course, all the buyout payments will be made.

But it doesn’t always happen like that…

Choosing the right person and properly preparing them to take over is essential to the success of an internal sale (succession). But many times, one or more issues exist and – if not addressed in advance – can cause major problems. There is a cost to inaction.

Lack of Preparedness
Preparing someone to take over the business is essential to the success of an internal sale. But grooming them in the mechanics of the business does not necessarily develop their ability to lead effectively, their ability of think strategically, nor their ability to make good decisions.

The result of an inadequately prepared successor can be employee turnover, loss of customers, declining revenues, diminishing profits, and missed buyout payments. There is a cost to inaction.

Actions to Take and The Benefits:
It’s very difficult for an owner to be objective about their successor. Therefore, it is essential to the success of a successor that an objective assessment be conducted and they get outside, objective coaching. It generally takes 6-12 months of coaching to develop the competencies needed for leadership and ownership success.

They’ll become a more effective leader, they’ll develop smarter strategies, and they’ll make better decisions.

Choosing the Wrong Person
Sometimes, no matter how much an owner and/or an executive coach grooms and mentors someone, they still won’t be effective at leading the company.

The problem, however, is that those shortcomings often are not evident until the successor takes over. And of course, by then it’s too late. In fact, often the shortcomings themselves aren’t apparent, but rather manifest themselves in declining business performance. Obviously, waiting until there’s no turning back is a mistake. There is a cost to inaction.

Actions to Take and The Benefits:
An objective assessment can reveal many of those shortcomings. But identifying a successor’s strengths and weaknesses is only part of what needs to happen. Having a successor work with an experienced executive coach can reveal lapses in judgment, gaps in interpersonal skills and blind spots. Usually these can be determined within about 3 months.

If it becomes apparent that the successor is the wrong person, a new successor can be recruited and groomed. The process of finding that right person can be completed in about 3-4 months. And at least another 9-12 months should be allowed to allow the successor to prove him or herself prior to the owner retiring.

Having to Choose Among Several People
When there are several potential successors, owners often put off choosing one as long as possible. They either can’t make the decision, hope that one will rise above the others, or fear the fallout that may come from one being chosen over the others.

But of course, procrastinating doesn’t resolve anything and more likely, will create even more problems and anxiety if done at the last minute. There is a cost to inaction.

Actions to Take and The Benefits:
The best way to make a decision that will be the least upsetting to people is one based on objective assessments. They will provide an unbiased picture of each person’s strengths and weaknesses. The results will allow an owner to either choose one over the others based on their strengths or split responsibilities based on their strengths. The objectivity removes a good deal of emotion from the decision process.

BOTTOM LINE

The bottom line is that, regardless of whether an owner plans to sell their company to an outside buyer or an internal buyer, waiting until months before the event usually produces less than desirable results. Taking action well in advance of a sale will either uncover issues that can be addressed (so the business is attractive to buyers), or will prove that everything is in order and will allow the owner to sleep at night, knowing their future is secure.

Contributed by Michael Beck

The 5 Most Common Successor Development Mistakes

Checkboxes

Most business owners know that a well-groomed successor should have at a working knowledge of operations, sales and marketing, customer service, administration, and finance. But this knowledge, although necessary, is not sufficient if a successor is to effectively lead a company into the future. In addition to having a firm grasp of the mechanics of the business, a successor must become an effective leader, think strategically and have good judgment, have vision, and adopt an owner’s mindset.

Mistake #1: Not Developing Effective Leadership Skills
The effectiveness of a person’s leadership is determined by how they are viewed by the people they lead. A leader who is not respected or trusted can’t be very effective. In contrast, a leader who people trust and respect will always get better results.

People decide how much they trust and respect a leader based on how that leader acts and how they interact with others. When a leader demonstrates that they do what they say they’re going to do (acts with integrity) and demonstrates that they are the kind of person they claim to be (acts in integrity), people learn they can trust him or her.

When a leader interacts with people in a manner that shows they respect and value them, the leader will earn the respect of those around him or her. Leaders accomplish this by treating people like people (rather than like things) and by treating adults like adults (rather than like children).

Mistake #2: Lack of Strategic Thinking
The ability to think strategically is essential for a leader guiding an organization. Without an understanding of what a strategy is and how to develop one, leaders will often focus on goals and tactics. In the absence of a true strategy, these goals and tactics are often misguided and usually result in new challenges.

A goal is not a strategy. It’s just a metric to measure progress in the execution of a strategy. Plus, it has no emotional or inspirational component. Tactics are not strategies either. Tactics are the means by which a strategic initiative can be achieved. Tactics – like goals – also have no emotion or energy behind them. They are simply the mechanics of how things will get done.

A good strategy (in contrast to platitudes, goals or tactics) addresses a problem or takes advantage of an opportunity and provides direction for the company. Additionally, a good strategy inspires people to achieve it. By developing a true strategy, excellent results can be achieved, and the desired financial goals realized.

But an effective strategy also needs buy-in from the team. Without buy-in, a leader simply gets compliance, and compliance is not the same as commitment.

Mistake #3: Lack of Vision
For a leader to guide a company, it is essential to develop a vision for the future of the organization. A vision imagines a future which is better, different, and/or larger than the current state. Without vision, a leader will simply continue to execute the existing business model, often getting left behind as the economy shifts, customer/client preferences change, and competitors adapt.

The ability to develop vision can’t be learned from a book. It arises from within and it requires a leader to have passion and purpose for what they do. A passionless leader can only develop goals – which are uninspiring by their nature. If a leader wants to engage his or her organization, he or she must create a future that inspires people.

Mistake #4: Not Developing Good Judgment
A successor needs to develop sound judgment and become business savvy in order to make good decisions. Good judgment comes from our ability to recognize when our emotions and biases cloud our decision-making. When we allow emotions to cloud our judgment, we make decisions that are misguided. Having sound judgment – unbiased by emotions – allows an owner to make good business decisions.

Business savvy is developed by thinking broadly about all aspects of the business, by being aware of what’s going on within the company, within the economy, with customers, and with the competition. (It also helps to develop an understanding of human nature.)

Mistake #5: Not Developing an Owner’s Mindset
Up until a successor takes over as an owner, they have typically only ever been an employee. There are several differences between the way an employee thinks and the way an owner thinks, and if this shift doesn’t take place, problems will arise.

Employees tend to think narrowly. They usually focus on the task at hand and/or on their specific domain of responsibility (operations, finance, engineering, etc.). In contrast, an owner needs to consider the bigger picture and how his or her decisions impact each aspect of the business.

Employees tend to think short-term. Their focus tends to be on current matters, current revenues, current expenses, and current profits. On the other hand, an owner needs to consider both the short-term and the long-term success of the business.

Employees tend to focus on doing good work while at work but generally don’t take their work home with them. On the other hand, owners learn that the business becomes their lives, and they think about it all the time.

And finally, employees know that if they make poor decisions, the business doesn’t do well, they become dissatisfied, or they lose their job, they can always find a new job elsewhere. Owners understand that failure is not an option. Generally, there is no “Plan B.” They understand that the business is their only future, and this understanding colors their decisions and actions.

One Final Issue…
There’s one more issue that needs to be considered:
It’s nearly impossible for an owner to effectively develop their own successor!

Here’s why:

Interpersonal Dynamics – In order for meaningful improvement to occur, open and honest conversations with the successor must take place. But it’s virtually impossible for a successor to be completely open, honest, and vulnerable when those conversations are with the owner.

Blind Spots – Regardless of the number of years of experience we have, our level of intelligence, and the amount of education we’ve had, we all have blind spots. We can’t see what we’re missing. Owners have blind spots.

Objectivity – Virtually everyone around a successor has an agenda – their co-workers, their spouse and especially the owner. They either want things to change or they want things to stay the same. In order for a successor to hone their thinking and judgment, they need an unbiased sounding board. An owner can’t be unbiased.

Time Constraints – There’s a reason it’s called successor development and not successor training. The growth that needs to occur happens over time. It won’t take place simply by attending a workshop or reading a book. And most owners simply don’t have the time.

Skill Set – Successful owners are expert at the business of their business, but the skills that got them where they are aren’t the same skills required to effectively coach and mentor a successor.

It’s critical for a successor to be properly developed so that the business thrives after the owner leaves and all purchase payments get paid. The risk of handing your company over to a poorly prepared successor is too great to leave their development incomplete.

Contributed by Michael Beck

How to Navigate Staying in Your Business While Stepping Back

Stepping Back
If you are thinking about staying in your business but gradually stepping back, you may find that preparing your business requires more than it seems—especially if the business needs to stay successful to continue to fund your life (and your family’s). There are important questions to ask to begin the preparation.
 
These questions are designed to spotlight the leadership elements that will need to be improved to keep the business successful, protect key employees and customer reputation, and fund you as you step back. There are strategic, financial, and tax considerations also, of course.
 
Business Results
1. How well is the business operating in terms of financials, customer satisfaction, and quality?
 
Successor Leadership
2. How much are you over-functioning to ensure acceptable business results?
3. Is there an internal candidate capable of growing the business?
4. What are the key development needs of the internal candidate?
5. Can the candidate be developed successfully within three years?
6. If there is no internal candidate, what is your plan for a new leader?
 
Leadership Team
7. What is the composition of the current leadership team?
8. Does the team function as your staff, or as leaders responsible for business results?
 
Leadership Data
9. What data do you use to track performance between financial statements?
10.How will you track performance when you are significantly less present in the business?
 
Changes in Your Role
11.How well has the business operated when you have been away for an extended time?
12.What parts of your functions would you first delegate to a successor leader?
13.What parts would you maintain until the successor demonstrates significant skills?
14.Who will maintain and cultivate key supplier relationships?
15.How have you defined your role—as owner or business leader?
 
If you want to step back from the day-to-day operation of your business, preparation is paramount. Asking these questions will help launch the hard work of understanding the roles you currently play, and how you can empower others to invest themselves in the business. The preparation will reap benefits for your customers, your employees, and for you. 

Contributed by Jim Grew

Planning on Selling Your Business? Think Again…

Selling Your Business

Everyone’s heard about how Baby Boomer business owners will be retiring and the wave of business successions/exits that will occur as a result of those retirements. But there’s a problem that almost no one is discussing. Our research clearly shows that there aren’t enough buyers for all those businesses. Here’s why and what you can do about it.

The SBA reports that there are roughly 6,000,000 small employers in the U.S. Of those 6 million businesses, approximately 3,600,000 are owned by Baby Boomers and about 2,400,000 are owned by GenX’ers. Based on the US Census population statistics, this means about 4.5% of Boomers own a business and about 3.0% of GenX’ers own a business. Human nature being what it is, we expect the percentage of GenX’ers who want to own a business to also rise to 4.5% as they get older. None of that is especially surprising – until you think about it a bit more. And then it becomes alarming. It becomes alarming because that rise in GenX owners from 3.0% to 4.5% represents only 1/3 of the Boomer businesses that will be for sale.

The result is that 2/3 of all Boomer businesses won’t find an individual buyer!

But what about strategic acquisition and private equity money? There’s lots of money looking for a home, right?

There are always companies looking to acquire or merge with businesses that complement or expand their core business. After all, the acquisition is considered “strategic” because it expands their market share, affords economies of scale, or adds products and services that dovetail with or complete their current offerings. But only the most profitable, highest regarded, or fastest growing businesses will be strong candidates for a strategic acquisition at full market value. The reality is (and always has been) that most companies will not be good candidates for strategic acquisition.

When it comes to private equity, pretty much all private equity investors are looking for opportunities with high profit growth potential. And as we know, most businesses are more about steady growth and consistent profits. They just don’t pencil out for that big, private equity payday.

Historically, between M&A deals and Private Equity deals, only about 15-25% actually close. Even if we’re optimistic and assume 25% of the available businesses can attract private equity money or a strategic buyer, it leaves a full 50% of Boomer businesses without a buyer or acquirer! (75% of the 2/3 noted above)

If owners REALLY want to sell their company to an outsider, they should work with an experienced M&A Advisor, Investment Banker, or Business Broker. It will maximize their chances of getting sold. In addition, they should get preliminary Quality of Earnings and Quality of Leadership reports done. These reports will highlight any weaknesses that need to be addressed before going to market, thereby increasing their chances of attracting a buyer and closing a deal. 

So, where does that leave owners who can’t find a buyer or attract money?
Here are the five options open to them:

“FIRE SALE” ACQUISITION
Businesses whose profitability and growth are weak or who aren’t quite a perfect fit for an acquiring company may still be candidates for acquisition. The problem, however, is that they won’t be able to command their full market value. Because they’re not as attractive to a strategic buyer and because there will be so many businesses on the market, the only incentive to complete a deal will be to lower their asking price – sometime significantly.

FIND A SUCCESSOR
One of the better options for many businesses will be to recruit and develop a successor, and then sell the company to them at full price. Some banks may be willing to fund a portion of the buyout, but the majority of internal sales will be paid (in part or in full) out of future cash flow. Consequently, it is critical to find a successor as soon as possible and ensure they are well-prepared to be an effective leader and a successful owner. It generally requires one to two years of development to hone someone’s leadership capabilities, their strategic thinking, and their judgment. Without that development, you run the risk of the business not being able to make those buyout payments.

KEEP THE BUSINESS
A variation of selling to a successor is to bring on a successor to run the company but not sell the stock. This option allows the owner to draw out the business’ value from the company while still owning it, but without needing to run it on a day-to-day basis. It requires finding and developing a strong successor, and then rewarding him or her for good performance.

CREATE AN ESOP
In the absence of a strong successor, an option that will also yield full market value is to set up an Employee Stock Ownership Plan (ESOP). This approach can increase employee loyalty and productivity, ensure business continuity, and gain some tax advantages. An ESOP can be effective, but it requires one or two years of planning, along with the training and development of the people who will be directing the organization. But it can be expensive to establish an ESOP and is therefore not a practical option for most companies.

CLOSE THE BUSINESS
If a business can’t find an individual buyer, is not a candidate for acquisition, has no successor and isn’t able to structure an ESOP, the only course of action will be to close the business and sell off the assets. Obviously, this is the least desirable outcome. The owner will receive pennies on the dollar and the livelihood of all the employees and their families will come to an end.

We believe all too many businesses will be facing this stark reality if they don’t put plans in place at least two to three years in advance of retirement.

THE BOTTOM LINE
The bottom line is that if your businesses isn’t in high demand and you’d like to sell it for a reasonably strong price, the best course of action is generally going to be to recruit and develop a strong successor.

If you’d like help recruiting, assessing, and/or developing a successor for your business, please contact us. It’s what we specialize in. www.ElicitingExcellence.com

Contributed by Michael Beck

5 Strategies for Effective Successor Development

5 Strategies for Successor Development

If you’re planning on selling your business to a successor (family or key executive), developing them as thoroughly as possible is essential.  Not investing the time to properly develop them can lead to retirement delays, frustrations, missed payments or worse (like having to come out of retirement and salvage things).

After working with leaders for the last 20 years, we’ve determined that these are the five smartest things you can do – above and beyond teaching them “the mechanics” of your business – to maximize the likelihood of success.

1. Get an Objective Assessment
Let’s face it, we all have blind spots.  And our blind spots cause us to miss things – especially when it comes to successors because we’re too close and have a lot riding on their success.

In addition, although you no doubt have many years of experience, your opinion is only part of the equation.  It’s critical to find out how others view him or her, since they’ll be the ones who will either follow the successor’s lead or will choose not to trust and respect them.

The smartest way to evaluate a successor is by conducting a 360° assessment.  This assessment solicits feedback from people all around them (you, peers, direct reports, etc.).  The report generated by an objective 360°assessment will highlight their strengths and their weaknesses, which will provide you with guidance on how to further develop them to be more effective.

2. Have Regular Developmental Discussions
Successors can’t be trained.  They must be developed over time.  In other words, if successors could be trained, they could simply read some books and attend a workshop or two and become a better leader and an owner.  It doesn’t work like that.  For someone to become more effective as a leader and owner, he or she must break old habits and form new ones.  They need to improve their interpersonal skills, learn to think strategically, and become effective at influencing others.  In addition, they have their own blind spots and can’t see what they’re missing nor can they see where they’ve gone wrong.

That’s why, for successor development to be effective, it’s important to have developmental discussions once a week or at least twice a month.  During these discussions you should talk about things that happened since your last meeting with them and suggest ways they could have handled things differently or more effectively.  It’s an ongoing process and usually takes about 6-12 months to get the results you want.

3. Help Them to Think More Strategically
I’ve seen it over and over again.  Leaders looking to increase profits develop a strategy to get better results.  Except the so-called strategy they develop is not really a strategy at all.  It’s just a goal.  Or a tactic.  Or sometimes it’s simply a platitude – a nice-sounding, but meaningless statement.

Regardless of whether they developed a goal, a tactic or a platitude, the results are always the same.  The so-called “strategy” is never realized.  No amount of encouragement, accountability or table pounding will lead to achieving the desired results.  Only a true strategy stands a chance of achieving significant results.

In order to help a successor think more strategically, two things must happen.  First, they need to understand the distinctions between strategies, tactics, goals, and platitudes.  

A good strategy addresses a problem or an opportunity.  Help your successor learn the differences between strategies and tactics.

And then they need to learn to differentiate between problems and symptoms.  A strategy developed to address a symptom almost always produces weak results and always causes new issues to arise, thereby compounding the situation.  The key, therefore, is to teach your successor how to uncover the problem or problems causing the symptoms.   

4. Help Them to Be More Persuasive/Influential
Mastering the ability to influence others is critical to the success and effectiveness of a leader.  A strategy, no matter how well thought out, will get mediocre results if there isn’t strong buy-in.  A leader will always get compliance because of his or her authority.  But compliance and commitment are two different things.

How do you influence people?  How do you change their perspective, so you get buy-in?  The most effective means of influencing others is by asking good questions and the use of analogies.

Asking good questions is an art.  It took me many years to master it, with lots of practice and plenty of missed opportunities.  Help your successor learn to ask questions that will change someone’s perspective.  The right questions will give them insight into how the other person thinks and give your successor the needed insights to shift the person’s thinking.

The second tool for influencing people is through the use of analogies.  Analogies are an excellent vehicle for bringing someone around to your way of seeing things.  Help your successor see that using an analogy can help people “see” and “feel” the concept they’re talking about and does it in such a way as to keep them from becoming defensive.

5. Refine Their Decision-Making Abilities
As every owner know, it’s up to them to make the final decision on every significant issue.  In order for your successor to make smart decisions, you need to groom him or her in several areas. 

Often, decisions must be made without certainty about the future.  Therefore, you need to help them improve their judgment and learn to balance risk and reward.  They need to be savvy about business in general and understand financial statements.  Since your successor has probably only ever been an employee (and never an owner), you need to help them think like an owner, see the big picture, and balance long-term and short-term needs.  And finally, you need to help them learn the wisdom in getting outside perspective.  It will help reveal blind spots and give them objective insights.

Properly developing a successor is important.  The future of the business depends on it, the livelihood of your employees depends on it, and your retirement plans depend on it.

If you’d like help developing your successor, please contact us.  It’s our specialty.

Contributed by Michael Beck

How to Choose a Successor

Successors

Selecting a successor to take over your business is serious business. The future of the company rides on it. The livelihood of the people employed depends on it. And the ability to make buyout payments to you relies on it.

In order effectively choose a successor, six aspects of a person need to be considered and evaluated:

  • Business Mechanics – their understanding of how the products and services get produced and delivered
  • Leadership Competence – their interpersonal skills, influence abilities, and a vision for the future
  • Strategic Thinking – their ability to distinguish between problems, symptoms, strategies and tactics
  • Sound Judgment – their ability to make good decisions and to choose an appropriate level of risk
  • Personality Traits – their drive, attitude, social skills and energy level
  • Cultural Fit – their alignment with the values and behaviors that matter to the company

Of course, understanding all this and ensuring a successor has all of these traits and competencies are two different things. Here are some guidelines to help evaluate a potential successor:

BUSINESS MECHANICS
Although understanding how the business works is important, it’s the easiest of the aspects to determine and/or develop. If they’ve worked for you for a while, you’ll have a pretty good idea of whether they understand the business. If they haven’t worked in the company, then have them spend time in each area of the business and see how well they do.

LEADERSHIP COMPETENCE
As an owner, a successor will (and should) spend much of their time leading rather than producing and delivering products and services. Therefore, leadership competence becomes critical for success. Fortunately, a 360 assessment will provide an objective picture of their leadership abilities and if needed, a professional executive coach can develop any areas needing improvement.

STRATEGIC THINKING
Reacting to a symptom instead of spending time understanding the underlying problem almost always leads to worse results. The best means of evaluating whether someone can think strategically is to allow them to develop strategies and present them to you. Not only will you be able to assess their abilities, but it will allow you to coach and mentor them if needed.

SOUND JUDGMENT
The only way to know if someone’s judgment is sound is to allow them to make decisions. Start with decisions that have a minimal impact on the on the business and/or can easily be corrected. As the decisions become more impactful, have them make their decisions in stages, checking in with you at each step so you can correct and mentor them before moving on to the next step.

PERSONALITY TRAITS
Before you evaluate a potential successor’s personality, you first need to decide whether the company needs an owner with the same personality as you or, at this point in the growth of the business, it requires a different type of individual. Once you’ve defined the type of personality needed, it should become fairly clear whether the individual has the needed traits. Remember, however, that unlike the other needed competencies, personality is innate and can’t be “developed”. Either they have the personality traits or they don’t.

CULTURAL FIT
Culture is defined by the values and behaviors demonstrated by the leadership of a company. If your successor doesn’t embody the culture you’ve established over the years, a different culture will emerge and the company will change. Additionally, if a leader professes to the importance of certain values but acts in a manner at odds with those values, it demonstrates a lack of integrity. Make sure your successor is living your company’s culture.

If you’d like our help evaluating and/or developing your successor, please contact us to discuss your situation.

Contributed by Michael Beck