russmichaletz,llc. uses a process which involves confidential surveys and conversations with important stakeholders in an attempt to uncover potential barriers to succession. This information is used to prepare action steps for consideration by the owners and their advisors for implementation. The whole process requires 2-3 months to complete. The steps are as follows:
Meet with key stakeholders to determine the scope and identity of those to be interviewed.
Design a customized survey for the participants.
Hold confidential interviews with each stakeholder which become as much an education process for them, as well as feedback for the report.
Identify a path forward which can achieve consensus and prepare a written report (typically a detailed powerpoint) of the same.
Present the report, including specific recommendations, to the appropriate governing body (board, controlling owners, family council, etc.)
Create assurance that the recommendations have the potential to be fairly considered and implemented by the client and their advisors.
What are some of the barriers to generational succession that typically call for consensus:
Is there actually voting support for expending the energy it will take to move the business into the next generation?
Is there sufficient talent in the next generation to create capable owners (if not managers)?
Will the current business strategy support the succession process financially?
Are there leadership and management succession plans in place to create confident and empathetic family owners?
What governance structures (outside board, family council, etc.) still need to be implemented?
Will the business be able to provide financial independence to the current ownership group and still grow for the next generation?
Can the business provide adequate investment return on capital to meet the expectations of those not employed in the business?
Will some owners need or want more diversification than others which will require a redemption strategy?
Are the concepts of investment return confused and co-mingled with family compensation?
Has family ownership been protected by appropriate owner agreements?
Will estate taxes be an insurmountable barrier if not addressed promptly?
Is enough effort being made to prepare the next generation for stewardship of the business?