Anybody can write a name down. That’s not a plan.

What does make a good succession plan?

It’s a question we find ourselves asking more and more as we grapple with all the change (planned and unplanned) that can happen over decades-long relationships. The reality is that we’ve had mixed results in succession planning ourselves, both at our portfolio companies and here at Permanent Equity. 

On paper, it seems like choosing a successor, getting them ready, and setting them up for success should be straightforward (not to say easy). A quick google search will beam you any number of 5- or 7- or 17-step guides to succession planning you could want. 

And yet. Succession has lackluster rates of success everywhere from mega-corporations to small, family-run businesses. Despite the plethora of advice about getting it right, the chances of actually doing so seem vanishingly small. Why? “On paper” doesn’t generally account for the fact that people are messy. Retirements, promotions, hirings – changes that seem neat on an org. chart – run into emotions, ego, relationships, and identities once they move off paper and into the real world. 

So, we’re on a mission to find out not only what works and what doesn’t in succession planning, what elements are needed in a good plan, who should be responsible for it, and what it should look like, but also the motivations, incentives, and interactions that can send the best plans sideways. 

In short, this project is a living documentation of what we know and don’t know about succession planning and the people involved. It’s not meant to be exhaustive, but it’s an ongoing collection of questions we’ve asked, methods we’ve seen, tools to help plan, and considerations to take into account – our FAQ for succession planning.

In these installments, you’ll find one of the “big questions” we’ve been pondering around succession planning. Think:

1. What should be included in a succession plan?

2. Who should own the process?

3. How do you identify the right candidates?

4. When does a plan need to be updated?

5. What steps can you take to begin?

6. When do you (or do you) tell your people?

7. How do you tailor a succession plan to your organization?

8. How do you get someone ready to step up?

9. What if there’s an emergency?

10. How do you choose who needs a succession plan?...

We’ve broken each question down into “On Paper” (what the research and best practices say about it) and “Our Take” (what we’ve seen and tried, how we think about it, and where adding people to the equation may make it messier). Then, there’s a “Character to Consider” – someone from business, history, or literature, who has wrestled with the issue, what the fallout was, and some lessons we might learn from their relationship to power and the transitioning thereof.

Within Permanent Equity, developing this resource required a group effort. As Managing Editor, Sarah George-Waterfield took the lead on curating existing research and character stories. She’s also the illustrator and designer. Tim Hanson and Emily Holdman, CIO/President and Managing Director, respectively, contributed Our Takes based on sometimes all-too-real operating experiences. And we worked together to hone a format and sequence intended to be constructive both for you and for our own leadership teams.

Our hope is that by deep diving into these questions, sharing our approach, and personifying some of the messiness with you that we’ll clarify our thinking on leadership transitions and open source a repository of research, ideas, and practices to make succession more successful for all.

– Tim, Emily & Sarah