How to plan for succession

At ING we became interested in the subject of succession through our own experience – we’ve been developing our own plans – and our work as communications consultants to architects: it’s one of the issues keeping practice founders awake at night. Often it’s the elephant in the room; neither founders nor staff find it easy to raise, even though both need to plan their futures. So to stimulate those discussions we commissioned a research report – nine case studies on practices ranging from Grimshaw to ADAM Architecture.

Agreeing financial and legal matters can be complicated, but there are established ways to do it. Much more difficult is the emotional aspect. It can unearth hidden resentments. Concerns over identity, legacy and culture all come into play. Small things become big issues, so it can be useful to bring in an experienced third party as a guide.

Timing is critical: founders shouldn’t leave too soon or too late. It’s also important to plan far ahead. Founders often have different personality types to the people they hired, and it takes time to prepare the right structure. Creative businesses can be poor at management training, and future leaders may need to acquire additional skills. Even young practices should bear it in mind. It’s fine to stay small and close a practice at retirement, but if the aim is a financial exit it helps to grow in the right way.

We all know about firms that fail to thrive following the founders’ departure, but there are also many that successfully evolve. Conscious planning makes the difference. It’s encouraging to look at businesses like RSHP, now in its third incarnation. Get succession right the first time, and a practice might go on for generations.