Succession planning; Eases the mystery of your firm's future.

• Author: Pinnell, Wayne R.
• Position: What now?

In June 2004, Haskell & White co-founder Steve Haskell met with our firm's partners to discuss a number of matters, and succession planning was at the top of the list. At the time, none of us realized how quickly we would be facing the issue head on--just three weeks later, Steve was diagnosed with lung cancer.

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Haskell & White, like many businesses, lacked a formal succession plan. However, we were fortunate enough to have 13 months with my colleague after he was diagnosed to prepare for a major shift in leadership and ensure that the company philosophy, vision and growth remained solid. Now, as I sit at the helm of the firm, I have a deeper appreciation of Steve's foresight and the firm's good fortune to have time to prepare for a smooth transition.

Succession planning is not a new phenomenon and most CPA firms understand the need for it. Yet, according to a 2008 AICPA Private Companies Practice Section survey, only 35 percent of accounting firms have a written succession plan in place, leaving a whopping 65 percent of firms vulnerable if they were to experience the loss of a leader.

Starting Early Ensures a Smooth Transition

For most leaders, thoughts of leaving their practice are fairly distant and succession planning is easily brushed aside to another day. However, a good succession plan isn't an intention, it's an ongoing process.

It takes time to develop criteria for a desirable successor as well as to actually select one. Plus, succession planning is not just about finding the next best leader; it's also about ensuring your employees and the organization as a whole is prepared for what could be extensive change. While a good succession plan grooms and trains the successor for the top spot, it also assesses the capacity of team members at all levels so they can expand their responsibilities and grow with the firm.

Whether or not a formal leadership succession is imminent in your firm, it is always a good idea to develop younger talent, hire with an eye for the future and plan several layers deep. You may find that the right successor is someone who started a career with your firm, then left, but is now willing to return in a leadership role. By tracking career paths inside and outside of the firm you increase the likelihood of a smooth transition when your current leader is ready to, or is forced to, step aside.

In my own firm's case, I was not hired under the assumption that I would become managing partner, nor...