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Feature   December 1, 2001   by Charles Seguin and Luanna McGowan

Success & Succession: Secret to winning the succession game – Knowing where you and your business are headed

Succession planning is, at its core, an end game. To win, you have to have a destination in mind, even if it might change from time to time.

To date we have talked about family participation, contingency, and management and ownership succession planning. We are now at the point where we must start to make some business decisions on where we are headed. At PricewaterhouseCoopers LLP, we refer to this type of plan as a Strategic Plan.

The old saying that you can never get lost if you know where you are going could not be further from the truth when it comes to your business’s direction. Unfortunately–as you would have read in the first article of this series– research shows that many readers seem to be taking this approach. The costs to you and your family in real dollar terms and in unnecessary stress and tension are potentially enormous and can easily be avoided, or at least minimized, by expending some effort on strategic planning.

The first step in instituting a strategic plan is to understand what it is. It isn’t just for big, publicly traded companies with professional managers who spend all their lives in boardrooms. Every business should engage in some level of strategic planning, regardless of size and regardless of form and complexity. For most businesses, it can be summarized on one page.

Let’s examine the elements of a typical strategic plan.

Mission and Vision

The process starts with a reaffirmation or a change in your mission/vision. Key forward-looking questions must be answered like:

Where do I see the business going in the future?

What market changes are taking place?

What change is taking place in my customer base?

What do I want the business to stand for?

Does this business still meet my personal objectives?

A typical shift in strategic direction usually comes when an operator begins to think about retirement. At this point the mission moves from a long-term business growth vision to a shorter-term personal value preservation and realization vision. Other causes of a change could be the franchisor relationship, the economy, or family dynamics.


Values, personal and business, have a tendency not to shift much over time, but they are very rarely communicated throughout your business. Values can be the most misunderstood aspect of your business, causing confusion and lack of direction. Key questions here are:

What values do I as an owner and manager stand for?

What values should guide all business decisions made by employees and family members?

Are we a business-first or family-first organization?

It is critical to long-term success that you articulate these values and that everyone in your business understands and behaves consistently with them. This also increases the value of your business since it becomes less dependent on you and more professional in its business approach.

With business-first values, what is good for the business–regardless of personal consequence and inconvenience–is what gets done. In family-first businesses, the family impact always wins over the business impact. Employees of the business can be greatly affected by your set of values. This is usually the prime reason for them buying into your management or not. Valuation can be positively affected with the right set of values for your business and management style.

Internal Analysis

A coach understands every aspect of talent present on his team and understands how to push the button to get the performance he needs when he needs it. Managing a business is no different. If you understand the strengths and weaknesses of your team and know how to maximize the plus and minimize the minus, you will dramatically increase your business success rate. If you don’t, well, it’s like rolling the dice: sometimes you win and most times you don’t.

What internal strengths can you build upon?

What internal weaknesses do you need to address and improve on?

Is your team still motivated? How is morale?

This is not navel gazing, but rather an honest self-assessment of your business’s capabilities.

External Analysis

Your business does not operate in a vacuum. Many external factors have an impact on your business: your employees, your family, your suppliers and business associates and your customers. Take September 11 for instance. We are all changed dramatically as a result of these acts. Other factors are layoffs and unemployment in your city, interest rates, the weather and the financial strengths of your suppliers. We call these inherent risks of doing business. The key questions to ask here are:

What external factors influence my business? Local? National? Industry?

What are the industry trends and how can I capitalize on them?

What is my competition up to?

Which factors can I control and which factors can control me?

How do I reduce my risk?

Defining Goals

Once you have identified the items above, it’s time to set some goals for the upcoming period. These should be as specific as possible and tied into your mission, vision, values and both internal and external analyses. Key issues here are:

What are the most critical strategic issues that need to be addressed within the next year? Two years? Five years?

Do these goals line up with my personal and business ownership and management plans?

Do these plans meet my family requirements?

Goals must be simple and clearly articulated. They must have substance and be direct. Vague goals, like “we will increase profits,” are largely useless unless accompanied by how to get it done.

Execution Strategies

Now that the goals are identified, it’s time to figure out how we are going to meet our expectations. Key questions here are:

Do we need to invest in people or assets?

Who is going to take responsibility to ensure success of each initiative?

What are realistic timeframes to see some success?

Do we need outside help?

Execution strategies are your day-to-day game plan. Every coach has a play book, and every player must study and understand the play book. Your business is no different. Use your employees to help you design your plans, and keep them in the loop on changes to the plan as they happen from time to time.


The last step is measuring actual results against expected results or benchmarks. It was once said by a fellow columnist here that you can’t manage what you don’t measure. This is so very true.

When you drive down the road headed for a specific destination, you are constantly verifying that you are headed in the correct direction through road signs and landmarks. Monitoring your business is no different. Set those landmarks in terms of benchmarks and measurable results, and you will be surprised how quickly and effectively you get to your goals.

Review performance with affected employees at regular intervals and use this information to accelerate, decelerate, amend or redefine your goals and execution strategies throughout the year.

Tying It All Together

Strategic planning supports your succession plans and ensures the success of your contingency plans and family participation plans. They are all interrelated, interdependent and intertwined. Missing just one piece means that you are traveling without a road map.

In order to preserve your family wealth, maximize the value of your business, and ultimately provide for your retirement, planning and documenting a strategic direction is the only way. Sharing the vision with family and employees will pay some huge dividends.

Charles Seguin, CA, is partner-in-charge of the PricewaterhouseCoopersLLP Automotive Retail Practice. The cross-Canada practice focuses on retailer growth and development, operations improvements, succession planning, acquisitions and divestiture, accounting, tax and finance-related issues. He can be reached via e-mail at

Luanna McGowan, LLB, is partner-in-charge of the PricewaterhouseCoopersLLP Centre for Entrepreneurs and Family Business. The centre provides facilitation, strategic planning, retirement planning and wealth management servic
es to entrepreneurs and organisations. She can be reached via e-mail at luanna.mcgowan@ca.

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