On Friday, the President of the United States was transported by helicopter to Walter Reed Hospital due to concerns about his health related to his coronavirus diagnosis.
One of the issues this raised was the 25th amendment that calls for the succession of power based on the ability for the president to continue duties, including upon death. The 25th amendment was introduced after the death of President Franklin Roosevelt, which uncovered the potential succession crisis.
On Friday, I did some research on how the United States outlines succession planning. While I knew that the Vice-President was on deck, and that the Speaker of the House and the Senate Majority Whip were next, I didn’t know after that. It turns out it goes at least eight deep ending with the Secretary of the Interior. Now that’s planning.
While the United States government has taken pretty detailed steps over the past 70 years to clearly show a line of succession – and importantly to protect that line – too many small and medium-sized businesses have not. I’ve worked with countless clients and when the topic is raised about CEO or Business owner succession, too few have a real plan. This American event being played out over the weekend should be an impetus to start talking about it.
What happens to your business if you die? Is there a succession plan in place?
This means everyone knows who is going to proverbially “sit in your chair” the next day. It means your business relationships – including clients and strategic partners – all know who will be in charge. It means that the people in line below the next person in charge all know that they are moving up and what their new duties and responsibilities are. It means knowing how to access life insurance to fund your beneficiaries. In other words, it means everything.
This isn’t a hard process, but it requires a time investment and some unpleasant conversations around mortality and succession. If you’re a CEO or business owner, what do you want to happen to your business the next day, weeks, months, and years?
Here’s your assignment: Take this week to create a foundation for your company’s succession plan. Build it out at least three people deep. Fund your Buy-Sell Agreement (which includes next steps for death and disability) with adequate insurance. And then include it in your Business Continuity Plan and communicate it to key stakeholders.
One final thought. What if you’re not the CEO? Do you care?
You should. The survival of the business that employs you might be at stake. While the CEO may not be doing the day-to-day work of building and/or selling the product, in small and medium-sized businesses, they are normally the ones who hold relationships and create vision. Don’t underestimate that importance. Go ahead and inquire if they have a businesses succession plan in place. You have a right to know.
In a world where pandemics may become more commonplace, we should all invest the time to look at our businesses and lives and ask, “Who’s on deck?”
Quote of the Day:
“The fact that an opinion has been widely held is no evidence whatever that is not utterly absurd.”
~ Bertrand Russell
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