Some Succession Success
I wrote last week about our plans at Permanent Equity to try to shed some light on succession planning in order to do it better ourselves. In fact, we’ve also made this a priority for our newly minted company boards, so it was a topic of discussion at our recent Operators Summit, where we hosted all of our portfolio company CEOs here in Columbia, Missouri, for a couple of days of discussion and fun.
Unbeknownst to me, our operating team had already begun working diligently on this topic and circulated to our CEOs a questionnaire that they would like filled out and then kept up to date so in the event of emergency, there was documentation in place to inform what we might do in the event succession was necessary. In the interest of open sourcing our way to better business outcomes, this is what we wanted to know:
Where am I key?
What is my influence?
How ready is my team?
An interesting nuance that came up in the course of discussing how to answer these questions was whether this should be more of an “in an emergency break glass” document or a long-term oriented transition thought piece.
Our hopeful answer to that was “Well, can it be both?”
Of course, you usually can’t optimize for the short- and long-term simultaneously, but since problems can arise at any time, it’s helpful to be able to pivot at any time. Time will tell if documenting the answers to those questions will enable us to do that with our portfolio companies, but I certainly believe this is a case where something is better than nothing.
I’m also interested to see the answers that come back. One of my suspicions about succession planning is that a reason it often doesn’t go so well is that successful CEOs may not be able to communicate why what they do works so well. When I was talking about that fact with Ryan, one of our operating partners, he equated it to trying to recreate one of your mother-in-law’s famous recipes. While she may pass along the ingredients and instructions, it never comes out quite the same, does it?
– Tim