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Succession Planning: Proper Preparation Prevents Poor Performance

March 3, 2020
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In the course of our multi-industry study of the 10 Attributes of High Performance Organizations, Allen Austin has identified a key characteristic shared by the best public and private enterprises. High Performance Organizations assemble and develop a high performance and cohesive leadership team. Whether publicly or privately owned, companies that 1) attract, 2) retain, and 3) develop a talented and dynamic corporate governance team succeed at a higher level than those firms that neglect these three pillars of success. Increasingly, family owned and run companies are modeling their succession planning programs on the governance models most commonly found in public companies. Companies that have been dominated by a single founder or the direct heirs of that single founder can sometimes struggle with a transition that moves the company beyond the control, vision, and drive of that single founder or the direct heirs.

Some of the sectors served by Allen Austin’s Retail & Consumer Practice are particularly noted for the high number of private companies. There are many family-run private companies in several of our emphasized sectors, including within convenience store, retail grocery, wholesale grocery, and food manufacturing and distribution. In our informal survey of America’s Largest Private Companies (2016; Forbes), almost twenty of the top fifty largest private companies are involved in food and beverage manufacturing, distribution, or retailing. These individual or family owned business are a vital part of our economy. If these successful private companies want to maintain their market place dominance, they must grapple with the thorny issue of the eventual replacement of the founder or Chief Executive Officer. Just as forward-thinking CEOs at public corporations must continually pose “what if” questions with respect to succession, private companies should also be prepared for an unexpected event, such as the sudden passing or disability of the CEO. All owners, in conjunction with the board if there is one, and the CEO should agree on the preferred characteristics of a successor, how that person will be selected, and if the selection process will be limited to internal candidates or open to external candidates. Succession planning benefits all stakeholders in the entity, including employees, customers, and vendors. Those stakeholders would all be adversely affected by the leadership vacuum that ensues when succession planning is not in place.

The Retail & Consumer Practice at Allen Austin can help private companies struggling with the difficult issue of succession planning. Allen Austin works with our clients as a partner to assist them in the journey to becoming a high performance leadership team and culture. Our Total Performance Leadership consulting practice includes our Proprietary Retained Executive Search Foresight™ Process which focuses on Global Retained Executive Search, Board Services and Competitive Landscape Mapping, and our Proprietary Strategic Transformation Insight™ Process which focuses on Culture & Organizational Effectiveness, and Strategy & Execution. We have a passion for purpose driven leadership and a burning desire to help our clients become the absolute best. The things we’re learning from incredible leaders who have led their own organizational transformations are astounding, as are the results they’ve achieved. High performance companies outperform their next best peers by 25% or more in virtually every major performance category. Transferring these learnings and helping our clients build high performance leadership teams and cultures that achieve exceptional results is the essence of our practice at Allen Austin.

To discover if Allen Austin’s Total Performance Leadership advisory capabilities can help your private company with leadership development or succession planning, please contact our Retail & Consumer Leadership Team: Dale AllardyceNamrata BangaCraig Bower or Frank Dipasquale.