1. Succession Planning
Presented by:
Wm. (Chip) Valutis, PhD
Surrogate Court Committee of the Bar
Association of Erie County

2. “The final test of greatness in a
CEO is how well he chooses a
successor and whether he can
step aside and let his successor
run the company”
— Peter Drucker

3. Succession
The phrase implies:
• An Event — occurs the day the boss quits
• An End — seen as a destination or date in
time
• Negativity — being pushed out the door
or placed on a shelf; influence stops
• A Barrier — something that must be
overcome or removed

4. Succession is...
A new beginning
! A process
! ! A racetrack (continuous)
! ! ! An ever-evolving phenomenon
Most of all, succession is…
! ! ! ! ! ! A journey

5. Adequate Preparation
is the Key
This includes:
• An agreement or willingness to go on
the trip
• A common destination and/or general direction
• Milestones for monitoring progress
• Fuel to sustain your journey
• Fundamental skills for dealing with trouble

6. Critical Milestones
1. Entry of the next
generation
2. Agreement to
perpetuate the
business
3. Completion of
strategic plans
4. Completion of estate
and financial plans
5. Identification of a
successor
6. Transition of power
and control
7. Competence and
satisfaction in new
roles

7. Guide to Obstacles:
A Checklist for Failure
• Secretive environment; little
communication or candor
• Triangulation: Communicating
concerns to anybody but the
source
• Conflict which has remained
active and unresolved for years
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8. Continued:
Guide to Obstacles:
A Checklist for Failure
• Mystery guests: impact of spouses and
others not directly involved in the
business
• Families who “stuff” their feelings until
periodic explosions occur
• Family dynamics and issues

9. Tips for Success
The Business
• Clear responsibilities and appropriate
authority
• Accountability and consequences for
performance
• Constructive contention
• Sound decision making and problem

10. Tips for Success
The Family
• Support and encouragement
• Non-family mentoring
• Appropriate education and outside
experience
• Freedom to risk
• Conflict management and
communication skills

11. Tips for Success
The Advisors
• Clarify roles and boundaries with the
owner/family/business
• Challenge clients/deliver bad news
• Facilitate understanding instead of
agreements
• Encourage multi-discipline interaction

12. Tools to Prevent Problems
• Guidelines for entry into
the business
• Formal developmental
plans
• Family councils,
meetings and/or retreats
• Codes of Conduct
• Mission Statements or
Family Creeds
• Advisory Boards or
outside mentors
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13. Questions Parents Must
Ask Themselves
• Do I listen openly to my son/daughter about his/
her plans for the business? Do I encourage such
dialogue?
• Am I able to encourage autonomy and hand over
areas of responsibility to my successor?
• Do I feel confident about his/her leadership
abilities?
• Am I able to take time away from the office without
worrying and constantly checking in?

14. Continued:
Questions Parents Must Ask
Themselves
• Have I attempted to impart all I know about
running the business to my successor?
• Do I trust my successor’s judgement when it
comes to handling, spending and allocating
company money?
• Have I openly championed the talents of my
successor to our clients? Allowed him/her
room to deal with them without interference?

15. Questions Successors Must
Ask Themselves
• Do I feel capable of managing this business?
• Do I have enough experience to run this business?
• Do I have a clear plan for how I would run the
business?
• Am I willing to take on as much responsibility for
the business as my parents do?
• Do I understand and respect my parents’ way of
managing the business?

16. Continued:
Questions Successors Must Ask
Themselves
• Whatever my role, do I willingly offer to take on more of the
business and try to master it?
• Do I seek out and initiate projects of my own and follow
through on them?
• Am I able to seek out and listen to my parents’ advice and
comments on my performance?
• If criticized, can I accept and objectively evaluate the
feedback?
• Do my siblings/family and I share a common vision for the
business?

17. Questions Advisors Can Ask
• Are you committed to family succession? Is it a
dream you deeply feel?
• Will your spouse and you be financially secure
after retirement?
• Will you choose a successor and set a firm date
to pass the baton?
• Does an absorbing new challenge or interest
await you after you leave?

18. Continued:
Questions Advisors Can Ask
• Are you able to delegate decisions and
authority?
• Are you willing to let others take new
business risks?
• Do you trust key people with financial
information?
• Do you truly believe there is life after
retirement?

19. Valutis Consulting is a full service management consultant firm. Our
approach is to investigate and understand organizational issues, customize
realistic solutions and design practical strategies to move clients toward their
specific business and personal goals. Our mission is to help our clients
unlock the potential of their organization and its people.
Please feel free to contact us with any questions or to schedule an appointment
to discuss your organization’s needs and how we can help.
(716)634-2553
chip@valutisconsulting.com
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