The Successor’s Development Agreement—10 Questions

by IdeaTransfer on May 22, 2011

In our experience, successors feel privileged and enthusiastic stepping into a succession opportunity.  That applies to family successors, assuming reasonably healthy family relationships.  And it applies even more to non-family successors.

But reality checks reveal this optimism can be fragile.  With the best intentions in place, it can still be difficult to actualize the succession process.   Why?  Because running a successful business fills all the available time and takes all the available resources.

  • Founders don’t budget for the enormous time commitment that lies ahead.
  • Successors don’t feel comfortable demanding more founder time.
  • Founders they claim their doors are always open.
  • Successors they say the door may be open, but the founder is too rarely there.
  • Successors need clear understanding about what areas are open for initiative and independence.
  • Founders have to make very clear to the rest of employees where authority and responsibility lie.

The first step is the Successor Development Agreement—not a binding legal document but a list of expectations and conditions.  Both parties approve the agreement and both parties monitor progress and modify goals and processes on a regular basis—monthly in the early stages, then quarterly, semi-annually, and annually as the relationship evolves.

Here are ten questions that founders should ask of successors to begin the work toward a formal Successor Development Agreement.   But no leading questions!  Successors first get a shot at expressing their own thoughts and feelings without any preconceptions from the founder.  After that founders should go back through the questions and add their perspective and insights.  Then the components of the Successor Development Agreement can fall into place for mutual agreement

  1. What is your mental picture of your role in the firm in say three years?  Ten years?
  2. What do you see you have to accomplish to make that ideal picture real?
  3. What obstacles to achieving that ideal picture concern you today?
  4. What areas of technical knowledge do you need master?
  5. What areas of relationship skills do you need to master?
  6. What areas of leadership ability do you need to master?
  7. How do you see us working together to effectively and confidently reach our mutual goals?
  8. What’s the best way to critically assess progress—objective metrics and subjective observation?
  9. What changes do you foresee inside and outside this business during this time frame?
  10. How do you see the company adapting to those changes?

So, founders and successors out there—how does the concept of Development Agreements sound to you?  Do you have any experience with it?  Would you be willing to share your thoughts and advice with the rest of us?  Please add your comments.

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