Success Strategies in the Journey of Succession


By Dr. Richard Shrapnel

Many owners and families have discovered the pitfalls and potholes of business succession. Below, Dr. Richard Shrapnel explores the success strategies for anyone venturing into succession.


It is [extremely] difficult to get good advice in such matters. – Australia

Many owners and families have trodden the path of business succession and discovered the hard way the pitfalls and potholes that can foul the journey, and in some instances inflict significant costs, both financial and personal. Learning from others’ experiences before commencing your own journey is a worthy investment. Missing a step at the commencement of your process could collapse your years of work and investment.

Baker Tilly International, a global accounting and business advisory network, in co-operation with Swinburne University, is continuing its research into the success strategies, barriers and dynamics in private business succession. In this third article in a series on business succession, Dr Richard Shrapnel PhD explores the success strategies for anyone venturing into succession.

A full copy of the interim findings of the global survey may be downloaded from

There are eight key principles that have emerged from our research across over 1,700 businesses in some 55 countries; principles that provide key references as you orienteer your way through your succession journey.

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Principle 1: Succession Is Not Retirement

The first principle is about getting your head in the right place. If you believe succession is about growing old, stepping down, surrendering, giving up, not being able to contribute anymore or anything along these lines, then you have lost your way before you have even commenced. A negative belief about the journey you are starting only serves to weaken the foundations of what you are seeking to build and will eventually collapse any efforts to be achieve success.

You, and everyone who will support you in this process, must see succession as being about evolution – Business Evolution. It is about growth, opportunity and building the future while you are there today. It is about the incumbent team taking responsibility for future proofing the capital value of the business by ensuring that the next team is capable, competent, experienced and will be able to take the business to the next level. Succession is the legacy you leave.


Principle 2: Start With Readiness

Before you commence any serious journey, preparation is a must and the journey of succession is no different. The incumbent team and the next generation team must get ready for the succession process as it takes time, commitment and motivation. For any critical change management program, a clear start is important. The succession process needs a clear and committed start and not something that drifts in and out as time permits.

Establish a process, formalise it, timetable it, monitor it and commit the necessary resources, including independent professional advice. Discuss the process openly, identify possible limitations and barriers before commencement and remove as many as you can and flag those that must be monitored as you progress.


You, and everyone who will support you in this process, must see succession as being about evolution – Business Evolut

Principle 3: Set Your Goals Before The Journey

The importance of establishing and setting your goals before you commence your journey cannot be overemphasised. Write down the outcomes/goals you want to achieve from the succession process. They must be clear and measurable but, more importantly, they must be compelling. If what you are seeking from the succession process is not energising enough to engage everyone supporting the process then you will not devote the time or resources required and will not have the energy to get over the inevitable challenges that will arise.

The goals that you establish before you commence will instruct and guide everyone participating in the process. They will:

•  Provide the motivation required

•  Act as the lighthouse to guide your direction

•  Provide a basis for agreement of intent and expectations by participants

•  Allow the development of a clear path for delivery of the succession process

•  Serve as a benchmark against which to measure the success of the process

•  Provide a basis on which to focus external advisors on the outcomes you are seeking.


Principle 4: Harmony Is A Must

Creating, sustaining and enhancing harmony through the succession process is a must.

Harmony will support and deliver on your goals and will serve to remove any barriers that might exist in achieving the goals you have set. Harmony with everyone involved in the process is what you must seek to achieve, but harmony does not mean conceding or being weak. Harmony requires that you communicate well and openly, that you listen (really listen and appreciate others’ views), that you actively invite contribution and provide active updates of progress.




It also means that you keep an absolute focus on achieving the initial goals set, and on business continuity and ongoing jobs. Harmony is about integrity and keeping true to the outcomes set and, if this requires that one of the participants will not achieve their preferred outcome, then harmony requires that you communicate this clearly, explain why and uphold this position.

In engaging with family and other persons involved in succession, you must recognise that they are seeking certainty about the process and their future. They wish to feel a sense of contribution and a positive outcome where there are opportunities for individual growth.


Principle 5: Price Is Not First

The focus of the succession process is on ‘continuity of the business’ and ‘ongoing jobs for employees’. No matter what your intent is – whether to sell, retain or transfer the business – these goals do not change. Getting the best sale price is not the first consideration, rather it is an outcome of the focus on continuity and jobs.

Succession is really about underpinning and growing the capital value of the business. This is achieved by providing certainty (the expression ‘capital value lies in certainty’ is very true), identifying the capital value drivers of a business and investing in them. When the capital drivers are identified, the questions you must ask to ensure they are correctly identified are:

•  Do we own them?

•  Can they be transferred?

•  Are they durable?

•  Do they deliver greater customer value and therefore competitiveness?

The competitiveness of any business lies in its employees and the relationships built with leadership. Therefore a focus on ongoing jobs builds the competitiveness of any business. If you focus on continuity and ongoing jobs, you are in fact drawing your focus to the capital value drivers of your business, which in turn supports sale price should you one day decide to sell.


Principle 6: Plan Early, Start Earlier

You cannot start your succession journey too early, bearing in mind that succession is about business continuity, ongoing jobs and building the capital value of a business. These are outcomes you want to achieve the moment you begin to think about starting a business and will continue for as long as that business exists.

The focus of the succession process is on ‘continuity of the business’ and ‘ongoing jobs for employees’. No matter what your intent is – whether to sell, retain or transfer the business – these goals do not change.

Establishing your goals before you commence the succession journey will allow you to develop a goal achievement plan to deliver on these goals. Part of this plan is to identify the stepping stones that will allow you to more easily achieve these goals.

A key aspect of your planning is to establish and understand the financial requirements (the financial needs) of the combination of the business, the generation that may be exiting and the generation that may be entering. For effective succession, the business has to be able to meet these combined needs, or expectations will need to be managed to a level that can be met by the business.

The process of building the financial capacity of the business to cater for the growing needs of additional generations of the family takes time and must be understood, planned for and acted on, well in advance of these needs materialising.


Principle 7: Equality Is Not Equal

If you have family, one of the key challenges you will face is finding the right balance of participation, ownership and distribution of wealth in your succession process. If some family members are, have been or might one day in the future be involved in the business and others won’t, then this is a challenge that you will need to address to ensure the continuity of the business and harmony.

In deciding how your wealth may be allocated in the future and, at the same time, seeking an outcome that will underpin and support family harmony over those decisions can be a real challenge. Your guiding principle is that equality does not mean equal, rather you must seek to be fair based on the historical and future contribution that family members have made, and will be expected to make.

This will require you to:

•  Involve early and openly all family members that your decision may impact

•  Establish, explain and seek contribution to the basis/principles upon which you will make your decisions

•  Determine the impact that your decisions may have on individual family members and discuss this with them

•  Keep everyone informed and maintain an open dialogue

•  Make sure you engage with and include your spouse/partner in these discussions (they will be one of your most important advisors)

•  Make a decision that is fair and clearly communicate your decision and reasoning.

Equality does not mean equal, rather you must seek to be fair based on the historical and future contribution that family members have made, and will be expected to make.

Principle 8: Ask Before You Get Lost

Succession can be a complex process and one where you may well need independent professional advice. Seek this advice very early and continue to retain that support throughout the process. Identify an advisor who you trust and who has the relevant experience prior to commencing your succession process. Openly discuss with them your intentions, goals, thoughts and concerns.

Remember your goals will be the ‘lighthouse’ for your succession process so set them carefully.




In seeking an advisor select someone who is mature (not necessarily old) and who will focus on the business, family and personal outcomes you are seeking. The taxation, estate planning and legal advice that you will require comes later and can be readily provided by specialist advisors in those fields. Commencing with, for example, taxation advice before you understand the business outcomes that you are seeking can result in a taxation driven solution that may not align best with your goals.




Seek your succession advisor wisely and allow them to work with your existing taxation and legal advisors so as to achieve the best blend of succession expertise and knowledge of both your business and family.

The eight principles are guiding principles (benchmarks) that you should continually refer to as they will assist you in orienteering your way through the succession process.


About the Author

Dr Richard Shrapnel PhD is a partner/executive director of Baker Tilly Pitcher Partners, Melbourne, Australia, an independent member of Baker Tilly International – the world’s 8th largest accounting and business advisory network by combined revenue of its member firms. Richard is a business strategist and one of the three chief investigators undertaking the three-year succession research project in partnership with Swinburne University.



1. The development of a family charter with family members prior to the commencement of a succession process is an excellent way of establishing expectations and contribution by members. It also creates a forum for discussion prior to commencing the journey. A guide on developing a family charter can be downloaded from




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