The more I work with companies as a partner, and the more I think about their business goals and apply my many years of experience to provide advice based on principled thinking that not only has their back, but their future, too, the more I realize that many practitioners never urge their clients to review and renew their succession plans.

Great, first step – you have a succession plan, which should be viewed as a long-term investment in the future health of your company! You are already ahead of the vast majority of business owners; however, just because you drafted it, does not mean that it is applicable to what is going on today. Plans are about the future – and nobody gets the future right very often, as two examples below illustrate:

Company One, has a plan and the shares of their closely held company are put into trust for “tax planning” purposes; and the current trustees are the patriarch and matriarch. The second generation is running the company, and they will be the ultimate beneficiaries of the plan. Fast forward several years, the patriarch dies, and the matriarch is showing signs of dementia and is fighting succeeding any control. This plan has not accomplished what was envisioned; as now the beneficiaries, who are operating the company, are actually doing such without any real power.

Company Two, likewise has a plan and once again the shares of their closely held company are put into trust for “tax planning” purposes. The ultimate beneficiaries are several siblings, not all of whom are working in the company. The current trustees are the patriarch and matriarch. Fast forward several years, the patriarch dies, and the matriarch, not wanting to bruise any of her children’s feelings, does not modify the trust. One of the beneficiaries goes off and starts a competing business. This plan has not achieved what was contemplated; as now one of the beneficiaries is a competitor!

Succession plans should be constantly updated; whenever things change, refresh your plan – things always change! While this might seem like chaos, it’s actually the opposite; the constantly revised succession plan is what makes order out of chaos, which allows you to remind yourself of your goals and to judge how well your business is performing. It becomes a long-term planning process that sets up your strategy, objectives and the steps you need to take by persistently being aware of the results to be obtained. This process of updating your succession plan will give everyone an opportunity to express their needs and concerns. Giving everyone that voice will also help create a sense of responsibility throughout your organization. This also relates to cultural issues, which are a significant contributor to any achievement of successful succession plans.

Start with the proposition that your succession plan is wrong. All succession plans are wrong. So keep the plan fresh and watch closely as reality moves forward. A successful planning process continuously watches the difference between the plan and reality. Reality swallows our assumptions and we need to keep track of where, why, and, how we were wrong. While a good succession plan is never done, it can effectively weather the unexpected as well as execute seamless transitions from one generation to the next.