The three components of a robust plan

We have been contacted by business-owning families for help with a number of things, including philanthropic strategy, working through a family conflict, and planning worthwhile, productive family meetings. We enjoy helping with all those things!

But the #1 reason we are contacted by business-owning families is for help with succession. This post addresses what is commonly the biggest challenge of a family business succession process: a founder’s difficulty in relinquishing control. Let’s look at three key components of a robust plan for addressing that challenge.

The Biggest Challenge: Difficulty Relinquishing Control  

Business consulting firm McKinsey & Co. recently published a wonderful article: “Passing the Baton: Creating Value through CEO Succession at Family Businesses.” The structure of this post is based on their finding that, “One of the biggest challenges during the transition is the outgoing CEO’s difficulty in relinquishing control. The [family-owned businesses] we surveyed address this with a robust plan for the incumbent to exit gracefully, while providing their expertise in a hands-off advisory role. The plan has three key components: process and culture enablers that prevent key person risk, phased transfer of roles and responsibilities to the successor, and a clear plan for the incumbent’s next chapter.”

Plan Component #1: Process and culture enablers that prevent key person risk

When critical knowledge, relationships, or decision-making authority live in one individual’s head rather than in the organization itself, your family business has a vulnerability known as key person risk. It’s risky because if that person left suddenly – through illness, death, or just walking out the door – the business would struggle to maintain operations.

The founder of a family business is often exactly that kind of key person. Maybe they’re the only one who really knows how to handle the bank relationship, or they’re the one every long-time employee calls when something goes wrong, or critical vendor contracts exist because of their personal rapport rather than a documented agreement.

As succession approaches, “Process and culture enablers” can mitigate key person risk. These are specific things a company does before and during succession to make sure that crucial knowledge and authority aren’t trapped in the departing executive. What does that look like in practice?

Process enablers: documenting decision-making frameworks that used to live only in the founder’s head, formalizing reporting structures and financial controls, writing down institutional knowledge such as why certain relationships or deals work the way they do, building redundancy into key relationships (e.g., the successor and other leaders also have direct ties to the bank and key suppliers, not just the founder).

Culture enablers: shifting the organization’s habits so people go to the right role or process for answers instead of defaulting to “ask the founder,” building trust in the successor’s authority before the handoff is complete, normalizing shared leadership rather than a single-point-of-authority mindset.

Rainmaker or Architect?

Succession planning is often talked about as “choosing and training a successor,” but McKinsey’s framing suggests just as much work has to go into de-risking the organization itself so it isn’t overly dependent on any single person, incoming or outgoing. In The Business Transition Handbook, Laurie Barkman advises departing executives to transition from the role of a “rainmaker” who does it all to a role of an “architect” who delegates, trains, and builds systems (p. 27). In a recent Indiana Chamber of Commerce-sponsored webinar on succession, M&A consultant Deborah Beck said she advises exiting founders “to become less important to the business unless they want to go with the sale.” That means “becoming more process dependent and less people dependent.”

Transferring the title and transferring the institutional dependency are two different jobs. A family business can grant a successor the CEO role on paper, but if the business still can’t run without the founder, key person risk remains. A helpful exercise for discussion purposes is Aspen Family Business Institute’s “Mapping Knowledge and Information Flow.”

If you’re the successor in this situation, you don’t have to wait for the founder to initiate this work. You can propose it. Ask to sit in on the next call with the bank. Ask to be copied on the vendor contract renewal conversation instead of hearing about it after the fact. Naming a specific piece of institutional knowledge you don’t yet have, and asking for a plan to get it, is easier for a founder to say yes to than a vague request to “let go of control.” 

Plan Component #2: Phased transfer of roles and responsibilities to the successor

The scope and pace of this transfer vary widely depending on the context, but some general observations can be made. “Roles and responsibilities” bundles several distinct aspects of the business that often transition at different speeds:  

• Operational decision-making (day-to-day calls on hiring, budgets, operations)
• Strategic authority (capital allocation, M&A, major partnerships)
• External representation (the face of the company to banks, key customers, industry peers)
• Symbolic/cultural authority (the person employees look to for “what does leadership think about this”)

Operational control often transfers first, while external representation and symbolic authority lag – sometimes by years. That mismatch can be where friction is generated. Here’s a matrix showing four types of authority and the typical transfer pace of each.

	Fast Transfer (months)	Gradual Transfer (1-3 years)	Long Tail (3+ years)
Operational Decisions	Hiring, budgets, day-to-day calls move to the successor early – often the first thing transferred
Strategic Authority		Capital allocation, strategic partnerships phased in as successor builds track record
External Representation		Successor gradually introduced to banks, key customers, industry peers	Founder may remain the visible face for key relationships well past formal handoff
Symbolic Authority			“Who employees look to” often lags other forms of authority, possibly for years

• The empty cells are meaningful too. For example, operational authority rarely stays with the incumbent for 3+ years. (If it does, that’s usually a sign the transition has stalled.) Conversely, symbolic authority almost never transfers in months; it’s earned through repetition and visible decisions over time, not granted.
• The diagonal shape is the “normal” pattern. Most healthy transitions show authority sliding from top-left to bottom-right roughly in order: operational, then strategic, then external, then symbolic. When you see authority types out of that order – say, symbolic authority transferred quickly while operational control still sits with the founder – that’s often a flag for a transition in title only. In such a case the successor has the office but not the authority.
• The matrix can be a diagnostic tool. Where is each authority type in your family business today? Do the things in the “long tail” column belong there for now, or has that aspect of the transition stalled? An additional discussion tool regarding what gets transferred and when is Aspen’s “7 Dimensions of Succession.”

This matrix can be useful for successors as well. If you’re the one stepping in, it can help you name friction you’re already feeling but haven’t put words to. For instance, having real operational authority but still being introduced as “the founder’s daughter” at supplier meetings is a mismatch between operational and external authority, and naming it specifically makes for an easier conversation than “I don’t feel respected yet.”

Plan Component #3: A clear plan for the incumbent’s next chapter

Two family business founders who’ve experienced succession, Lydia Henshaw and Scott Snider, are panelists in the Keep IN webinar. At about the 25-minute mark they speak directly about this dimension of the plan. Ms. Henshaw says that “a period of mourning” is required when a founder leaves the business they started, even when the transaction is profitable and the transition smooth. In time, she and her spouse found it helpful to work through the Monk Manual Life Atlas. A faith-based resource for those approaching retirement is the DePree Center’s “Purpose in the Third Third of Life” which we found helpful.

Mr. Snider, whose new business trains advisors on exit planning, says most founders are focused on what they are transitioning OUT OF, and much less clear about what they are transitioning INTO. He recommends that exiting founders get a personal coach to help them put a personal plan together. Barkman writes, “Most owners feel that they get pushed out of their business when they leave. The happiest exits occur when an owner feels that they are pulled to their ‘next.’” (p. 37)

In this regard we loved reading the Indianapolis Business Journal article, “Where are They Now?” published May 1, 2026. IBJ checked in with 2015’s Champions of Innovation from the first of an annual series on innovation. What are they doing now, 11 years later? Several who had sold, retired, or otherwise exited their businesses have become happily involved in mentoring young innovators. Albert Chen of Telamon Corp. passed the CEO baton to his son in 2015 and started a robotics company which is giving hands-on robotics opportunities to high school students in all 92 counties to help develop a more robust Hoosier workforce. “Which I’m probably not going to see,” he said. “But at least … I’m able to help.”

Call Us for Help with a Happy Exit 

Succession is challenging – for everyone involved! And the most challenging thing about it, according to research, is an outgoing CEO’s difficulty in relinquishing control. Whether you are the one stepping back or the one stepping up, Family Business Facilitators stands ready to engage with you. We’ll help your family business develop process and culture enablers that prevent key person risk, begin a phased transfer of roles and responsibilities to a successor, and clarify a plan for the founder’s next chapter. Use the Contact Us form below to get a free, no-obligation Zoom meeting scheduled at your convenience. Here’s to happy exits, thriving next gen leadership, and flourishing family businesses.