Aspen current thinking column


Spring 2013

May Current Thinking Column

Saturday, May 30, 2015

Leslie Dashew recently connected with longtime colleague, Tom Plaut of Deloitte Tax LLP, to discuss business legacy and its entrenchment with succession planning. See below for an excerpt from their conversation:

Tom Plaut: Leslie, you’ve written a lot about the seven dimensions of succession planning in a family business. I’d be interested in getting your commentary around what those seven dimensions are and specifically, which of those dimensions apply to legacy?

Leslie Dashew: Typically when people think about succession they think about succession of leadership or management — and, for estate planning purposes, transition of ownership. But what we found is that many times the succession that is successful has to address four other areas as well. One is succession of authority. In closely held businesses, we find that one of the challenges is the inability of an owner to let go of control. The challenge is that the owner thinks, “This is my baby! I know it better than anyone else,” and it’s hard to let go. So many times they’ll appoint somebody to be president and vice president with the anticipation that they will succeed them, but not let them make any significant decisions.

One of the reasons someone may not trust the next generation of leadership is because they don’t trust their values. A classic one that we see now is when a younger generation wants balance in life, but they’ve seen the older generation be workaholics. The older generation may say the young ones just don’t work hard enough to keep the business alive. The next dimension that contributes to this issue is a succession of knowledge. I often hear leaders say the next generation doesn’t know enough: “I’ve built the business, I’ve learned every aspect of the business, and they need to know all of that and if they haven’t created it they can’t know it well enough.” I also hear leaders say, “I have a number of key employees who have been like family to me; they’re really essential to this business, and I want to make sure they’re taken care of and that they’re retained.” Often the other side is a younger generation who say, “Dad has held on to people way too long.”

To see Leslie's full featured interview, click here

To learn more about Deloitte and their thoughts on business succession planning, click here


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