Success strategy report card
An effective succession plan utilizes the same skill sets that farmers employed during their school days to make the honor roll. In fact, Dave Specht’s work as a family business consultant has led him to create the Family Business Report Card to help guide families through the development of a succession plan.
“It gives families a fun and creative way to gauge whether or not they’re positioned for success as they develop a succession plan,” says Specht, coordinator of family business programs in the University of Nebraska Center for Entrepreneurship in Lincoln.
His letter grades represent building blocks critical to a succession plan, and Specht is a tough grader. It’s not ever possible to earn an A or B on his grading scale! Here are the subjects that his student/families must master:
- C: Contingency Plan: What happens in the case of the unexpected?
- C: Cash Flow: How much does the senior generation need?
- C: Communication: When will the senior generation step back? What are the younger generation’s expectations?
- D: Decisiveness: Decision-making is critical. Are family members ready to make hard decisions?
- D: Determination: Succession plans are difficult. Does your plan anticipate the real potential for hurt feelings?
- F: Family: Preserving family relationships is what it’s all about. Is the family legacy your driving force and overriding incentive for succession planning?
Specht says that side-stepping potential conflicts is likely to sabotage the ultimate transition. “It’s better to have difficult conversations while you’re alive than to have an attorney explain things after your death,” he says. “You have to be determined to do the work required of the process and understand that it’s hard and has lots of roadblocks.”