Succession planning is a critical part of future proofing founder-led businesses.
It encompasses formulating the strategy, enabling a smooth transition of leadership and facilitating growth whilst safeguarding the company's values, legacy and unique culture.
I'm Not Ready To Step Away Just Yet
Whilst many founders view succession planning as relevant only once they are ready to transition out of the business, it is a nuanced process that requires careful planning and can take time to strategise and implement. Dynamics within a founder-led business tend to be unique and early succession planning allows ample time to address and work through potential challenges that can arise during the transition.
Identifying and nurturing the next generation leaders of the business could be a lengthy process, especially if some of the talent needs to be recruited externally. Starting this process early allows gradual skill development and leadership training, ensuring that the new management team is well-equipped to lead the business through the next phase of growth.
Despite being a publicly listed company with the founders holding a minority stake, Seek maintains a founder-led culture. Then CEO and co-founder Andrew Bassat approached Ian Narev to join the business in 2019 as chief operating officer. It was only in 2021 that Narev succeeded Bassat to become the CEO after working closely together over the period.
Also, take the Zimmermann sisters for example, both Nicky and Simone remain in executive roles within the business even though Zimmermann has just transitioned into its fourth private equity partnership with Advent International.
I Still Want To Be Involved
We speak with many founders who, despite wanting to step back from management roles, still want to maintain some level of involvement with their business. For example, many of these founders thrive on the creative aspects or working closely with their customers but find administrative and people management tasks associated with leadership less appealing. Often they want to focus on what love doing in business rather than running the day-to-day operations.
For founders who want to remain connected to their business while stepping away from day-to-day management responsibilities, succession planning is also key. It allows them to gradually reduce their leadership roles, freeing up their time and enabling them to explore new ventures, mentor future leaders, or focus on strategic initiatives that align with their passions and expertise.
My Business Is Still Growing Strongly
Succession planning becomes even more critical for businesses that are experiencing strong growth. Founders often find their business growing beyond a point they can handle on their own – steering a business from $2m to $20m of revenue is very different to taking it from $20m to $40m! For businesses with ambitious growth targets, succession planning is often the secret sauce that ensures you have the right structures and systems and processes in place to unlock your business's full potential and create an enduring brand that thrives well into the future.
Consider this: when your business sets its sights on international expansion, it will likely require a leader experienced in navigating global markets. Part of the succession planning process then will require the search and cultivation of leadership talent to enable this next leg of growth.
To really scale and accelerate growth often requires the injection of capital and taking on additional risk. Founders can be a bit more risk adverse as a significant portion of wealth is often tied up in the business; we can help you de-risk by taking some chips off the table so that you’re comfortable taking on more risk to facilitate the growth of the business.
Succession planning also involves preparing for future challenges. Diversifying manufacturing is a critical part of future-proofing a business particularly amidst escalating concerns around supply chains and geopolitical issues. This requires careful planning and investment. The presence of a growth capital partner is a great catalyst to start this process and can provide valuable resources and perspectives to support this effort.
How Glow Can Help With Succession Planning
Private equity can play an important role in succession planning, supporting founder-led businesses in their transition and providing a route to liquidity. However, it is more than just about injection of capital into the business to accelerate growth or cash off the table to help you derisk. Finding an experienced partner whose values align closely with yours is critical to preserving the legacy of your business whilst facilitating the next stage of growth.
At Glow, we have access to a broad pool of talent through our well-established networks and resources compared to what a business can typically reach on its own. This allows us to tap into a wider range of candidates, including those with specialised skills and experiences that are critical for the growth and transformation of the business. Businesses backed by private equity attract high-quality talent who are seeking opportunities in an organisation where the growth strategies are well-defined and aligned, has the financial backing to execute ambitious and transformative growth initiatives and offers attractive equity incentives.
We have significant experience recruiting various leadership roles for portfolio companies and will work with you to evaluate and identify the right talent for specific roles and ensuring they not only have the right skillset but are also aligned to the culture of the organisation.
Our mission at Glow is to support founders and help them achieve their dreams. We are founder focused and place an outsized emphasis on retaining and safeguarding the unique culture and values that have driven the success of the business to date. As an experienced founder, Kate Morris, our co-founder, can draw on her own experienced to support the succession planning journey.
Succession planning is never easy, but by partnering with Glow, you will have a partner working through these challenges alongside you. Leaning on our past experiences, we will help you anticipate these challenges and sidestep potential pitfalls. We want to help the business to endure and grow beyond the founder. Together, we will formulate a strategic plan to drive the next phase of growth whilst upholding the legacy of your business.
Are You Ready?
Succession planning is a pivotal part of a business’ journey, particularly for founder-led businesses embarking on their growth journey. While the prospect of succession planning and giving up control might initially sound daunting, it signifies that you have succeeded by building a business with longevity.
A well-planned and executed process with the right partner will enable a seamless transition of leadership whilst safeguarding stakeholder interests. With you, we want to nurture a business that can grow beyond the founders and maintain the legacy of the business.