8 Items to Consider in Succession Planning for the 60-Something Owner

My wife has been bugging me for over a year to get my affairs in order. For what? I’m in my early 60s. I’m not going anywhere. Yet, since the pandemic, she’s paranoid that something will happen to me, which would put our mail-inserting and envelope-printing business in jeopardy. Your thoughts?

For a company with over 50 employees, the owner, leadership team, advisory board, and human resources manager have probably discussed in depth what to do if you, the owner, can’t perform your duties.

For a smaller print-and-mail company, succession planning may be postponed because you feel vigorous and things are running smoothly.

Until they don’t. And there’s the problem.

At this point, clients stop me and say, “LaManna, why do you always have to talk about death?” Why? Because, statistically, owners in our industry stick around until the bitter end. We’re not like the software geniuses who retire at age 35 or the golden parachute retirees who get a pension at age 65. We’ve got our sleeves rolled up, and we’re IN the graphic arts business for the long haul. Maybe even the final haul.

If we are in our 60s, we need an in-depth succession plan, not a flashing arrow pointing to our replacement.

Here are 8 items to include in your plan:

1. Describe emergency succession if the owner is incapacitated or dies. What’s the first thing that must happen if you cannot run the company? How will your team keep things going without interruption or alarming vendors and customers?
2. Dig into the nitty gritty on the emergency side. Who can sign checks? Banks do not like surprises, so this is critical. How will customers be notified? In writing? In person? Who will pick up the reins on day-to-day tasks? Are there written procedures and SOPs? Who will manage production, sales, deliveries, etc.? How will customers get billed and money collected?
3. Outline the big picture. For a planned and orderly transition, you must include long-term plans as well. Your successor must know where the business is headed and what the upcoming decision points are going to be. They must be aware of the company’s financial situation and have access to sensitive and confidential areas of the business.
4. Get creative. You and your team will have to visualize the future business landscape, market, customers, and competitors that will be in place when your successor takes over, whether it is in 5 years or 20 years.
5. Envision all the areas that may touch our business in the future: laws, taxes, environmental policies, transportation and roads, workers, living situations, safety, world conditions, weather, computing and artificial intelligence, and so much more. What will be the specific impact on the business? What do we need to put in writing for clarity or instructions?
6. Identify highly-qualified talent you can recruit, train and promote. Include these high-potential managers as much as possible in your planning discussions. Owners worry that employees will abuse this trust and run to competitors with inside information. Understandable. That’s a topic we cover early in our coaching program with owners.
7. Leave plenty of time. Ideally, planning requires 3 to 5 years to identify, train, and indoctrinate (for lack of a better word) leaders so they are invested in the business and can visualize themselves successfully carrying the mantle.
8. Create a work environment where good people want to stay instead of fleeing if something dramatic happens. We don’t want our best people jumping ship, now or later.

I can’t emphasize this enough: Before you retire, sell, or kick the bucket, you should be confident about your chosen successors and their ability to lead.

In the graphic arts industry, I often see owners waiting to include their successors until the last minute, which is a shame. Owners may hoard power, worry about confidentiality, or refuse to stop and make time to transfer knowledge and responsibility. In these situations, the succession process is rough, the transfer is not agreeable, the planning is short-sighted, and vital aspects of the business are not considered.

Long-range planning is not a one-and-done meeting hammered out over coffee and donuts at a board retreat. Deliberate and ongoing planning works best with expert input and facilitation. Your confidential advisor should attend your meetings and help challenge institutional suppositions and norms.

Clients who work with me know it takes time and effort to plan for the future. Yes, I am relentless about discussing mortality. Planning has to happen now – today – while you’re alive and mentally competent.

You can see why owners over age 60 need 3 to 5 years to plan for succession in. Review my 8 elements of planning with your team so those next in line will be ready to lead and flourish.

We’ve prepared a free guide for owners considering their exit and succession plan, written for owners just like you. Download Succession Planning Simplified to help you get started. If you need further assistance in planning your exit from your print-mail business, get in touch. Your wife is right. The clock is ticking.