Grooming a Successor to Build on Your Legacy

Grooming a successor

Finding your replacement doesn’t just happen. Here’s what business owners need to know.

In a perfect world, a family business would be passed down between generations—or from family to outside buyer—in a swell of profitability and goodwill. That’s because the owner would have easily recognized the right successor, so handing over the reins would have been an easy decision.

Yet in the real world, just 41% of surveyed family-business owners have confidence in their succession plans, and many business transitions fail. Fumbled transitions can lead to long-term family rifts, resentment among key employees, and, in the worst cases, damage to the business along with the wealth it creates. Only about 30% of family-owned businesses survive past the founder, and only 12% make it to a third generation

Considering the stakes, owners should put the same level of care into succession planning as they put into building the business, says Joe Wojcik, a senior wealth strategist at Huntington Private Bank®.

“You’ve got to have a plan and it’s got to be your plan, because as the owner you know your people, your business, and who is capable of being your successor,”§ he notes. Owners who do well, he says, often do the following:

Have an open mind. Owners, like most people, may be biased toward what’s familiar to them and choose successors based on affection. A better measure is demonstrated performance over time.

“You have to be willing to change your designated successor along the way if you have to,” Wojcik says.

Consider assigning specific roles to individuals, based on their proven abilities, he suggests. Wojcik works with one Ohio business owner whose company is now on its third generation.

“All three sons have roles. One is CEO, one is CFO, and the third is head of operations. They respect each other’s specific talents, and the business has gone to a level that grandfather and father would never have dreamed of.”

Delegate.You can’t test someone’s leadership skills without ever giving them opportunity to lead,” Wojcik says.

For example, you might have a potential successor take charge of purchasing or another department, to see how they work with customers and key employees. For a new leader to succeed, that person must prove she or he can build the respect of key people within the organization.

“Respect isn’t by title,” Wojcik points out. “Respect is earned.”

Owners should put the same level of care into succession planning as they put into building the business.
Joe Wojcik
Senior Wealth Strategist, Huntington Private Bank

Plan methodically. Wojcik recommends setting specific milestones for owners to hand over responsibilities, such as a full understanding of billing, customer base, or production.

“Otherwise it’s too intangible,” he says. “Have a relatively detailed plan and then keep records and notes to help you formalize your process.”

Communicate. A clear line of communication is central to a successful transition, and it should include not only the owner and potential successor but other key stakeholders as well.

“The successor has to be open and honest with the owner to help ensure that they have a meeting of the minds on leadership, business practices, and a broad spectrum of things,” Wojcik says. “There needs to be constant professional feedback.”

Know your financial needs. Sometimes owners will sell the business and not provide for their own financial requirements.

“Discuss transition with professionals like your Private Bank advisor before you roll it out to your family,” Wojcik suggests.

Working with your Huntington Private Bank team—a team that has deep experience negotiating business succession plans—can help make sure you’ve covered all the bases.

Each business is different and requires a specific approach to transition, but most will benefit from thoughtful preparation. A methodical approach, with plenty of advance planning, can help family businesses establish a strong succession plan that continues to grow the business far into the future.


Read more Private Bank Insights

Explore more trends and issues related to wealth management, investments, and more.
Go Back
Woman on computer

Who Should Be Your Trustee?

Trusts are powerful tools, and the trustee you select can make a difference.
Read Article

Deloitte Private. "Long-term Goals, Meet Short-term Drive, Global Family Business Survey 2019.”

Alshaikh, Alaa. “Solving Succession Problems in Family-Owned Businesses.”

§Interview with Joe Wojcik, February 10, 2020.

Favaro, Ken, Per-Ola Karlsson, and Gary L. Neilson. “The $112 Billion CEO Succession Problem.”

The information provided is intended solely for general informational purposes and is provided with the understanding that neither Huntington, its affiliates nor any other party is engaging in rendering tax, financial, legal, technical or other professional advice or services, or endorsing any third-party product or service. Any use of this information should be done only in consultation with a qualified and licensed professional who can take into account all relevant factors and desired outcomes in the context of the facts surrounding your particular circumstances. The information in this document was developed with reasonable care and attention. However, it is possible that some of the information is incomplete, incorrect, or inapplicable to particular circumstances or conditions. NEITHER HUNTINGTON NOR ITS AFFILIATES SHALL HAVE LIABILITY FOR ANY DAMAGES, LOSSES, COSTS OR EXPENSES (DIRECT, CONSEQUENTIAL, SPECIAL, INDIRECT OR OTHERWISE) RESULTING FROM USING, RELYING ON OR ACTING UPON INFORMATION IN THIS DOCUMENT EVEN IF HUNTINGTON AND/OR ITS AFFILIATES HAVE BEEN ADVISED OF OR FORESEEN THE POSSIBILITY OF SUCH DAMAGES, LOSSES, COSTS OR EXPENSES.

Huntington Private Bank® is a team of professionals dedicated to delivering a full range of wealth and financial services. The team is comprised of Private Bankers, who offer premium banking solutions, Wealth and Investment Management professionals, who provide, among other services, trust and estate administration and portfolio management from The Huntington National Bank, and licensed investment representatives of The Huntington Investment Company, who offers securities and investment advisory services. Huntington Private Bank® is a federally registered service mark of Huntington Bancshares Incorporated.

The Huntington Investment Company is a registered broker-dealer, member FINRA and SIPC, and registered investment advisor with the U.S. Securities and Exchange Commission (SEC). The Huntington Investment Company is a wholly-owned subsidiary of Huntington Bancshares Incorporated.

Certain insurance products are offered by Huntington Insurance, Inc., a wholly-owned subsidiary of Huntington Bancshares Incorporated, and underwritten by third-party insurance carriers not affiliated with Huntington Insurance, Inc.

Trust and certain investment management services are provided by The Huntington National Bank, a national bank with fiduciary powers. The Huntington National Bank is a wholly-owned subsidiary of Huntington Bancshares Incorporated.

Non-Deposit Trust, Investment and Insurance products are:

NOT A DEPOSIT • NOT FDIC INSURED • NOT GUARANTEED BY THE BANK • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • MAY LOSE VALUE

Third-party product, service and business names are trademarks/service marks of their respective owners.