Succession Planning

By Gary McCoy

All businesses, especially those owned by families, face the inevitable task of transitioning leadership and/or ownership between generations.

According to an article by Will Kenton at Investopedia. com, “Succession planning is a strategy for passing on leadership roles—often the ownership of a company—to an employee or group of employees. Also known as ‘replacement planning,’ it ensures that businesses continue to run smoothly after a company’s most important people move on to new opportunities, retire or pass away.”

This issue looks at how the spring industry is facing the succession planning challenge. We have assembled a series of articles to assist springmakers from among the many resources available and include practical stories from two springmakers.

“It’s hardly an exaggeration to consider the successful transition of ownership and leadership from one generation to the next as two family business miracles,” begins Rob Sligh, a consultant with The Family Business Consulting Group, Inc. You’ll find more practical advice on how to overcome the odds to pass a business between generations in his article “Succeeding at Succession” on page 24.

Phyllis Weiss Haserot is the president of Practice Development Counsel and specializes in helping companies solve their intergenerational challenges. Her article, “How To Think About and Achieve Succession Planning,” looks at the urgency of putting together a succession plan and some cross-generational considerations that companies may face. You can find her article on page 26.

As we examine the subject of succession planning, we present a “Flashback” article published in the January 2005 issue of Springs. “Preserve the Experiences of Your Family Business” by Scott Fithian, found on page 32, provides a process to consider in succession plans to preserve the perspective and history of the company so future generations will know the origin of the family business and all the experiences that made it succeed. Fithian believes, “This will help them carry the business’s success into the future.”

Former SMI president Reb Banas of Stanley Spring and Stamping Corporation shares what he has learned about the process in “Succession Planning Without a Plan,” on page 30.

One family is in the midst of passing their business from the second to the third generation, as you can read about in our regular “Springmaker Spotlight” feature. In a “Special Edition on Succession Planning: Sustaining Scandic Springs for the Next Generation,” you will find the story of Scandic Springs in San Leandro, California, where current company president Hale Foote is in the midst of passing the torch to his oldest daughter, Andrea. There was a time when Foote was uncertain whether the business would endure to the third generation. Read more on page 57.

If you are looking for a short, practical guide to succession planning, be sure to check out our “Book Corner” review of “Family Business Succession: The Final Test of Greatness” on page 61. Originally written in 1992, you’ll find a good, nuts and bolts guidebook that has been updated many times to help those who are starting down the path of succession planning, or who have already put together a plan and are looking for a benchmark comparison.

Relay races in track or swimming require several individuals to be involved. Regardless of the race, each person counts on the other person to do their part. As in a relay race, passing a business from one generation to the next involves a host of people to get the job done. We hope this issue inspires and educates you along the way as you tackle this challenge.

Good luck passing the baton!