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Management & Value-Driven Succession Planning

Management & Value-Driven Succession Planning. Thinking Planning Executing Presented by Rocco Surace, CPA, Partner. Value-Driven Succession Planning. Value-driven defined as: Are you going to realize all that your business is worth Are there value increasing initiatives?

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Management & Value-Driven Succession Planning

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  1. Management & Value-Driven Succession Planning Thinking Planning Executing Presented by Rocco Surace, CPA, Partner

  2. Value-Driven Succession Planning • Value-driven defined as: • Are you going to realize all that your business is worth • Are there value increasing initiatives? • Do performance targets designed to insure the retentionand increase of the company value? • How well are operations and marketing aligned to sustain and grow the company? • How is the company developing so that they are not viewed as only a commodity option? • What areas and which people should your value-driven succession plan address?

  3. Value-Driven Succession PlanningWhat elements do we need to consider? • What is the long-term direction? • What is needed to maintain and improve operational excellence? • What is needed to exploit this excellence in the right markets? • Who are the key people & positions that need to be involved: • What will we need for alignment & buy-in:

  4. Value-Driven Succession PlanningLet’s take some time to think. Why Change? • What are you giving up by not exploiting the value you have built within your company? • Agree on the goal • Identify the requirements from your strategic direction

  5. Value-Driven Succession PlanningLet’s take some time to think. What To Change? • What are the threats, the complaints, the UDE’s • No formal strategic or operating plans. • How is value being defined? • What are the current risks to operations – what can happen? • What are the current market risks – what can happen? • What are the current customer risks – what can happen? • What are all the markets our abilities can serve? • How commoditized are you in your markets? • Customer retention philosophy. • Ownership – Family – Management – mischaracterization & handling of the business direction.

  6. Value-Driven Succession PlanningLet’s take some time to think. What To Change? • What are your threats, complaints, UDE’s

  7. Value-Driven Succession PlanningLet’s take some time to think. What To Change To? • The Direction of the Solution • What is needed to: • Assure that ALL of the key players are aligned around this strategic objective • Get the best from your people • Position & develop them to contribute to the long-term success of the company • Assure the required supply of qualified & aligned people for the company • Have a process to properly identify and bring in the help you need • What are the obstacles to starting this process?

  8. Management Succession Planning • Elements to Consider • What is the long-term direction? • Where is continuity & development of human capital required? • Who are the key people & positions: • To be succeeded? • To be developed? • Consider the needs & capabilities of each individual. • Timing of advancement opportunities. • Alignment & buy-in. • What happens if you are not there tomorrow?

  9. Management Succession PlanningLet’s take some time to think. What To Change? • What are the threats, the complaints, the UDE’s • No formal plan for each key person. • How is retirement being defined? • How does each key person define readiness for retirement? • The key people & positions are not identified. • Plans are not tailored for personalities, needs & abilities. • Too little movement in promotion & development. • Insufficient time for training & transition. • Selection of the wrong individuals. • Ownership – Family – Management – mischaracterization & handling of the issues.

  10. Management Succession PlanningLet’s take some time to think. • What To Change? • What are the threats, complaints, UDE’s:

  11. Management Succession PlanningLet’s take some time to think. What To Change To? • The Direction of the Solution • What is needed to: • Assure that ALL of the key players are aligned around this strategic objective • Get the best from your people • Position & develop them to contribute to the long-term success of the company • Assure the required supply of qualified & aligned people for the company • What are the obstacles to starting this process?

  12. Management Succession PlanningLet’s take some time to think. • What To Change To? • The Requirements of the Solution • Alignment of the future needs of the company with the identification andthe availability of the required resources to get there. • An aligned, well-trained succession of people who are ready to insure thelong-term success of the company. • Having the right supply of people who are continually improving the company, for quality, cost & time, and its value of offerings in the market. • Being known as a great place to be. • Having trained, experienced, and motivated people ready to step intokey positions. • Having these qualified people with development plans established forthem individually, which will help in their retention.

  13. Management Succession PlanningLet’s take some time to think. • What To Change To? What are your requirements of the solution?

  14. Management Succession PlanningLet’s take some time to think. • What To Change To? • What are the potential negative side-effects? • Some people won’t get on the train. • Certain people will not agree with decisions. • What others?

  15. Management Succession PlanningLet’s take some time to think. How to cause the change – it’s a simple process: Clearly state the injection(s) Identify the intermediate objectives Identify the obstacles Identify the resources Assign responsibilities & dates Sequence the activities Check progress & remove new obstacles

  16. Management Succession PlanningLet’s take some time to think. How to cause the change – an outline of possible objectives: • Define where you want your succession plan to take you, especially in light of your current strategic plan. • What will you look like in three to five years and what will your key people be doing then? • What openings will you need to fill due to attrition, promotion or expansion? • What new disciplines will the company require, and how will you fill them? • How does your succession plan fit with your expectations of whereyour company, markets, and internal situation will likely be going?

  17. Management Succession PlanningLet’s take some time to think. How to cause the change – an outline of possible objectives: • Define how you will get from how you look today, to what you want thecompany to look like at the end of your current planning horizon. • Who will be involved and what will each be doing? • When will they start and end each part of the process and how will youjudge their progress? • What criteria will be used to determine each candidate’s ongoing fitness for his or her career path? • Does each candidate offer and demonstrate continuing potential andprogress toward meeting the requirements you have established? • On what basis will you determine if someone is not progressing appropriately, and what can you do to help that person develop to their fullest extent? • What alternatives can you offer those who are not meeting expectations?

  18. Succession Planning Thank you! Rocco Surace, CPA, Partner The Bonadio Group 716.250.6600 rsurace@bonadio.com 100 Corporate Parkway, Suite 200 Amherst, NY 14226 bonadio.com

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