Succession Planning Insights

How do you know if you work for a truly great leader? You may like your job, be well compensated, and have good relationships with the people you work with, but does that define great leadership?   Those outcomes may be attributed to good leadership but don’t define “what is a truly great leader.”  Great leaders can help improve your work life; however, working with great leaders can give you something even more important. Leadership is not just about leading; it's about elevating the performance of those around you, especially those directly within your charge. Effective leaders understand that it's not enough to manage and lead people. They must also nurture and empower others to become leaders themselves. John C. Maxwell, author, speaker, and leadership expert, in his book, "The 5 Levels of Leadership" (2011), outlines a leadership framework consisting of five levels, where levels 4 and 5 represent how the most advanced stages of leadership are achieved. At “Level 4,” leaders focus on developing other leaders. “They are skilled at identifying and nurturing leadership potential in their team members. Their primary goal is to empower others and help them grow into effective leaders.” Here are the compelling reasons why leaders need to develop other leaders: Sustainability—An organization's long-term success depends on adapting and thriving in a changing world. When leaders create other leaders, they ensure their organization continues to prosper. A strong leadership pipeline can help to secure the future of the business. Diverse Perspectives—Every individual has a unique set of skills, experiences, and perspectives. By developing new leaders, fresh ideas, insights, and new perspectives are brought to the table. Having a diversity of thought is crucial for problem-solving and future innovation. Increased Productivity—A leader empowers their team members to become leaders, resulting in a more engaged and motivated workforce. Empowered employees who are trusted are more productive and take greater pride of ownership in their work. Succession Planning: Leaders who create other leaders effectively build a talent pool from which they can identify successors. This proactive approach to succession ensures a smooth transition when leadership changes occur. Resilience: A team of leaders is better equipped to handle challenges and crises. When leaders encourage leadership at all levels, the team becomes more resilient and capable of taking initiative during difficult times. Seeing their team members grow and succeed can be immensely fulfilling for any leader. It adds a sense of purpose to their job and strengthens the bonds within the team. Those are the signs that you work for a great leader. How many of these have you seen in your leaders? #ceos #leadership #development #execution Want more? Subscribe to the fastest 23 seconds of leadership wisdom at https://lnkd.in/gKaqqhPC

You could have a new business partner in the blink of an eye. Consider the example of a business with two owners (50/50). Let's call them Nic & Jeff. If Nic dies, Jeff instantly has a new business partner. . . . Nic's wife. She is lovely & brilliant, but she knows very little about the business and doesn't have the qualifications to operate the business. Nic & Jeff were brilliant because they established a buy/sell agreement. The agreement says that in the event of death or disability, the healthy owner would buy the deceased or disabled share of the business. Awesome! Problem solved. COMMON MISTAKE However, Nic & Jeff weren't that brilliant because they never funded the buy/sell agreement. Jeff is on the hook to pay Nic's wife millions of dollars, and she wants the money yesterday. COMMON SOLUTION Life Insurance - 1/ Nic would own a policy, Jeff would be the insured, Nic would be the beneficiary. 2/ Jeff would own a policy, Nic would be the insured, Jeff would be the beneficiary. 3/ The life insurance proceeds would be utilized to pay the spouse If you own a business, what steps have you taken to make sure you don't have a surprise new business owner join your company? --Nic

🚨 Attention Privately-Held Business Owners 🚨 I recently came across this The Wall Street Journal article about the Supreme Court's decision in Connelly v. United States and felt it was important to share how it could impact many of you with privately held businesses. The ruling affects the way life insurance-funded buy-sell agreements are treated for estate taxes, potentially leading to significant tax liabilities. 🔍 What Happened? In this case, the Court ruled that life insurance payouts used to buy out a deceased owner’s shares must be included in the company’s value for estate tax purposes. This decision could mean a hefty, unexpected tax bill for many business owners. 💡 Here’s What You Should Know: 1. Check Your Buy-Sell Agreements: Ensure they’re up-to-date and include regular independent valuations. 2. Reevaluate Your Insurance Policies: Understand how they might affect your estate taxes. 3. Explore Alternatives: Cross-purchase agreements or using LLCs to hold life insurance might offer better tax outcomes. 📈 Why This Matters: Overlooking these details can lead to financial surprises that could burden your business and family. Proactive planning and consultation with experts are crucial. 🛠️ Next Steps: 1. Review Your Current Agreements and Policies: Make sure they comply with the new legal landscape. 2. Consult Professionals: Work with tax and estate planning advisors to understand the impact of the Connelly decision. This ruling highlights the need for ongoing attention to succession planning. Don’t let this catch you off guard—take steps now to protect your business’s future. #FamilyBusiness #SuccessionPlanning #EstateTax #SupremeCourt #BusinessStrategy #TaxPlanning https://lnkd.in/eXwJ95vj

The SINGLE greatest responsibility you have as a leader: Be obsessed with hiring A-players, and create an environment where they can succeed. Why is this SO important? Because it’s the best way to protect your team and your customers. A-players are your teammates who: → Put in the hours not because they have to, but because they care → Make everyone around them want to up their game → Come to you with 15 ideas you never thought of → Take ownership like it's their own company They're top talent who could work anywhere. But they choose YOU.  The fastest way to lose them? Hire people who don't care as much as they do. A-players want to work with other A-players. → To be challenged by their peers.  → To learn from those better than them in certain areas. → To feel like they're part of a winning team. And keeping someone who's underperforming? You're also crushing their confidence. They might feel like a failure, when chances are, they're just in the wrong role. They deserve to find a job where they can succeed. I learned (the hard way) to be obsessive about finding the right people, for the right roles. Which looks like: 1. Hiring slowly (as painful as this is!) ↳ Taking time to find the right fit 2. Having honest conversations early ↳ Helping people find roles where they can succeed 3. Paying top-of-market ↳ Top 1% talent drives 10x better outcomes 4. Giving meaningful challenges ↳ Problems worthy of their talent 5. Removing obstacles ↳ Clearing the path for their best work 6. Creating space for excellence ↳ An environment where everyone can thrive Because 10 people who are OBSESSED > 100 people who just want to milk a job. As you scale, everything (and I mean, everything) is downstream from the quality of your team. Great people are magnetic to other great people. And when everyone's in their zone of genius? That's when people start doing work even they didn't know they were capable of. _ How do you ensure everyone on your team is set up for success?

Interim leadership is a governance risk. A record number of CEOs are stepping down, and so far in 2025, nearly 1 in 4 replacements are interim. That’s a problem. While interim CEOs provide short-term stability, the long-term implications reveal a governance risk because it seems that Boards are not fully achieving their succession planning roles for top positions, especially the CEO. We’re already seeing many Boards treating leadership transitions as a one-off instead of a core governance process. Interim CEOs, while possibly a good short-term stop-gap approach, actually generate longer-term risks. Research cites these likely consequences: ⚫ Strategic paralysis from limited decision authority ⚫ Leadership uncertainty, which often generates an overall decline in employee morale and engagement ⚫ Investor skepticism around continuity and confidence Firms with interim-to-permanent transitions often underperform compared to those with direct permanent hires. Succession planning is imperative, and in my recent article for Forbes, I share why Boards and CHROs must collaborate to not only fix the pipeline but also improve governance. When done correctly, organizations can minimize disruptions, maintain stakeholder confidence, and ensure sustained performance. Read it below! #HumanizingHumanCapital #WorkforceStrategy #Governance 

🚀 Ready for a Buyer to Knock on Your Door? Here's the Secret to a Regret-Free Exit! 🚀 Picture this: Your business is booming. Revenues are growing. Out of the blue, a buyer shows interest. Are you ready to seize the opportunity? Let's break down the three key elements for a successful, regret-free exit. They’re more connected than you think! 💡 1️⃣ Business and Management Readiness 🏢 Your business is thriving. But is your management team prepped to handle the reins? Meet Sarah. She went down the path to sell her company, but her management team and natural successor weren’t ready. She enjoyed being the best salesperson, customer service resolution advisor, and urgent delivery driver. With the distraction of the sale process, the business struggled. Sarah was focused on the demands of the prospective buyer, who eventually walked away, seeing it wasn’t the business it initially looked like and too reliant on Sarah. Sarah regretted not investing more in leadership development. When the buyer knocked, she missed out on achieving the deal. 2️⃣ Personal Finances and Infrastructure 💼 A buyer’s interest can mean a financial windfall. But without a solid financial estate and tax plan, you might stumble. John learned this lesson. He exited his business but had done limited estate, tax, and financial planning. The tax impact of the deal terms and his lack of personal infrastructure took a large bite out of what he had been paid. Robust financial and tax planning would have helped him leverage the benefits of the deal to its fullest potential. 3️⃣ Mental Readiness for You and Your Family 🧠 Selling your business is a life-changer. Are you emotionally prepared to let go? Is your family ready for the shift? Lisa sold her company but wasn’t mentally prepared. She struggled to let go. Her family also struggled to adapt. Her sudden desire to travel and vacation wasn’t part of their plans. If they had been ready, they could have embraced the change and enjoyed the benefits sooner. When these three elements align, you're not just ready for a buyer—you’re ready to maximize the deal and confidently step into your next chapter. Ignore one, and you risk missing out on the opportunity of a lifetime. So, business owners, if a buyer knocked on your door today, would you be ready to answer? 💬

𝐓𝐡𝐞 𝐀𝐫𝐭 𝐨𝐟 𝐒𝐮𝐜𝐜𝐞𝐬𝐬𝐢𝐨𝐧 𝐏𝐥𝐚𝐧𝐧𝐢𝐧𝐠: 𝐒𝐞𝐜𝐮𝐫𝐢𝐧𝐠 𝐘𝐨𝐮𝐫 𝐅𝐚𝐦𝐢𝐥𝐲 𝐋𝐞𝐠𝐚𝐜𝐲 As the saying goes, "A family business is someone’s life’s work." And yet, the majority of family business owners delay succession planning—despite knowing it’s inevitable. Why? No one wants to face Father Time. The PROBLEM is, succession isn’t just about handing over the keys to the next generation or selling a company. It's about building something that will endure long after you’ve passed the baton—whether that's just money and a mission or an enterprise with a family office and foundation. But here’s the hard truth: Succession planning is an art. It’s a journey of Life, Family, Business, and Wealth planning—not a checklist. When done well, it’s a thoughtful, intentional process that clarifies & aligns family goals and integrates family and business governance into a purpose-built machine—ready to be passed on, scaled up, or sold. But equally importantly, it safeguards what owners and families worked so hard to build. 𝐀 𝐟𝐞𝐰 𝐨𝐟 𝐭𝐡𝐞 𝐜𝐡𝐚𝐥𝐥𝐞𝐧𝐠𝐞𝐬: 𝘍𝘢𝘮𝘪𝘭𝘺 𝘊𝘰𝘯𝘧𝘭𝘪𝘤𝘵 & 𝘔𝘪𝘴𝘢𝘭𝘪𝘨𝘯𝘮𝘦𝘯𝘵: Owners want to transition, but without alignment, family friction, blurred roles, and missed opportunities arise. 𝘚𝘤𝘢𝘭𝘢𝘣𝘪𝘭𝘪𝘵𝘺 𝘢𝘯𝘥 𝘗𝘳𝘦𝘱𝘢𝘳𝘦𝘥𝘯𝘦𝘴𝘴 𝘎𝘢𝘱𝘴: It takes more than a profitable business to transition. 90% of transitions fail, and 80% of businesses don’t sell—even profitable ones. The skillset to build a scalable asset is different than building a business. 𝘎𝘰𝘷𝘦𝘳𝘯𝘢𝘯𝘤𝘦: Lack of clear governance leads to chaos during transition, with no structures in place to support future leadership or ownership. 𝘓𝘦𝘢𝘥𝘦𝘳𝘴𝘩𝘪𝘱: Identifying the right leaders and creating a seamless handoff is crucial. Here’s where many family businesses go wrong: Waiting until the last minute to start planning. The reality is, true succession planning takes 5-10 years, and most owners don’t realize they’re unprepared until it’s too late—when they’re out of time, energy, or patience. Planning for transition is a team sport—it’s not something that can be handled alone. Owners need the right team of tax, legal, wealth, banking, and transition strategists, and those advisors need to be aligned and communicating. Together, they design a holistic plan to protect and build assets, family, and legacy. Succession planning isn’t a one-time task. It’s a long-term commitment to creating something that lasts across generations. 𝘈𝘥𝘷𝘪𝘴𝘰𝘳𝘴 𝘢𝘯𝘥 𝘰𝘸𝘯𝘦𝘳𝘴, 𝘭𝘦𝘵’𝘴 𝘤𝘩𝘢𝘵 𝘢𝘣𝘰𝘶𝘵 𝘩𝘰𝘸 𝘸𝘦 𝘤𝘢𝘯 𝘢𝘳𝘤𝘩𝘪𝘵𝘦𝘤𝘵 𝘵𝘩𝘦𝘴𝘦 𝘫𝘰𝘶𝘳𝘯𝘦𝘺𝘴 𝘢𝘯𝘥 𝘱𝘳𝘰𝘵𝘦𝘤𝘵 𝘵𝘩𝘦 𝘣𝘦𝘥𝘳𝘰𝘤𝘬 𝘰𝘧 𝘵𝘩𝘦 𝘜.𝘚. 𝘦𝘤𝘰𝘯𝘰𝘮𝘺! #familybusiness #familyoffice #familyenterprise

"How did it get so late so soon?" Dr. Seuss's words are surprisingly relevant to family enterprise CEOs facing succession planning. Research from our new Family Enterprise Advisory practice reveals a concerning reality: 42% of family enterprise leaders describe their succession practices as informal, while 32% admit their approach is reactive rather than proactive. Throughout my career advising boards on CEO succession, I've seen why this can happen: The daily pressures of running a business make succession feel like tomorrow's problem. But here's the truth—finding your successor deserves the same strategic approach as developing a new product line or entering a new market. In fact, a proper CEO succession process can take 7-10 years from planning to successful transition. This isn't just about finding a replacement—it's about preserving your legacy while enabling future growth. Don't wait for the night before noon. Your company's future depends on the groundwork you lay today. Read our full insights on family enterprise succession: https://bit.ly/3EgNnNT #FamilyEnterprise #FamilyBusiness #CEOSuccession

There were two stories last week about potential executive leadership changes at JPMorgan Chase and BlackRock. There was uncertainty over the success process. This made me think about the risks when succession planning processes are lacking whether at a managerial or executive level. The impacts of when succession for key roles is uncertain include operational disruptions, loss of organizational knowledge, and diminished stakeholder confidence. Without a clear plan, companies may struggle to maintain stability and continuity during leadership transitions, potentially affecting overall performance and morale. To mitigate these risks, I recommend leaders take the following actions to establish an effective succession planning process: 1) Evaluate critical roles within the organization and identify potential successors, considering their skills, experience, and leadership potential 2) Invest in development programs that enhance the skills and capabilities of identified successors. Provide mentoring and coaching opportunities to prepare them for future leadership roles 3) Ensure the succession plan is a living document by regularly reviewing and updating it to reflect changes in the organization, market conditions, and individual progress. By proactively addressing succession planning, leaders can reduce the risk of not achieving success and enhance the resilience of their organizations. What do you believe is critical to an effective succession planning process? #RiskManagement #Talent #Strategy #Leaders Longview Leader Corporation

Choosing the right CEO is the #1 job of the Board of Directors. Suzanna de Baca and the NACD Heartland Chapter recently asked me to weigh in on some of the steps involved in a well-thought-out process. I wanted to reporst here. There's certainly more, but this is a good start: CEO Succession: Ten Tips for the Board of Directors   One of the primary responsibilities of a board is the selection and evaluation of the CEO and other executives. For most directors, overseeing the CEO is a major focus, but planning for the next leader should also be an ongoing priority. Unfortunately, many private company boards do not have structured processes in place for CEO succession.   NACD’s recent CEO Succession Planning Survey indicates that 69% of respondents have discussed long-term succession planning for the CEO in the past year, but 36% reported they would not be prepared to identify a successor if their CEO were to depart tomorrow.    Does your board have a CEO Succession plan in place, or know what to consider when discussing plans for future leadership?   For advice on CEO succession, I turned to Bonnie Hagemann, CEO, EDA, Inc., co-founder of WomenExecs on Boards on Boards, and board member at NoBiasAI, and EDA. Bonnie, an executive development and governance expert, shared the following advice:   CEO succession is a critical and delicate process that requires attention to detail. It's essential to get it right, as mistakes can be costly to undo. Here are Ten Tips to guide you:   1.        Hire for the future direction, thinking three years ahead. 2.        Set a timeline and keep the process moving to avoid delays. 3.        Establish a decision-making process upfront, including how the board will vote (majority, unanimous, nom/gov committee recommendation, etc). You will need this for decisions throughout. 4.        Determine what, if any, SEC filing rules must be followed. 5.        Consider if the current CEO will be involved in the search process. 6.        Determine if the CEO will receive a transition plan with incentives. 7.        Ask if the current CEO will remain on the board. 8.        Determine if there are viable internal candidates. 9.        Consider if you will conduct an external search. If so, which firm will you use? 10.  Once you've determined a plan for approaching CEO candidates, develop a matrix to evaluate them holistically. Criteria to consider:  a.        What does the company need to achieve its mission b.        Cultural fit, especially with the senior team c.        Industry knowledge d.        Career successes e.        Competencies f.           Leadership traits g.        Personal drivers By following these steps, you'll be well-equipped to navigate the CEO succession process and find the right leader for your organization.