How to create a succession plan for when you step down as CEO, from 2 founders who did it. This premium story was unlocked by IndeedforSMB
When father-daughter duo Russ and Sky Stephens started their business, the Association of Professional Builders , in 2014, they did it with an eye to the future. They saw a need for ongoing training and support for homebuilders in Australia, New Zealand, Canada, the US, and the UK who struggled not just with generating leads but also managing their entire sales process, as well as a need for creating a better industry for both businesses and consumers.
The plans typically cover three things, Russ said: the leadership change, the financial transition, and systems management. Having a plan in place mitigates future risk for the company by knowing who will take over when the time comes and exactly how that transition will happen. To help create their succession plan, Russ and Sky brought in an outside coach who specialized in family businesses. Russ found the coach because he had a domain Russ wanted to buy.
"You have to build the company in a way that it has the resources to survive a black-swan event in the future," he said."This is probably the number-one reason most companies don't last — they don't have the resources to see them through. That's something I've been very keen to build and also help Sky to understand. It's all about delayed gratification."
Russ wants to make sure they aren't committing too much detail up front to the plan now, leaving less room in the future to maneuver what's best for the business. He worries getting too detailed at this point could lead to false expectations, with either him or Sky taking on something they shouldn't.
"So what we did right at the beginning was we set out the terms where there would be a transfer of share ownership," he said, adding the transfer happens every six months."That transfer was capped to a certain limit per year. So all the time Sky was growing and learning and improving, earning share ownership, a certain percentage of shares would transfer over to her."
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