Borrowing an analogy from the game of chess, checkmate represents the end of the road. The king is faced with a situation in which he can no longer be saved by another piece, nor make a move without being beaten by the adversary. For founder-led businesses setting out on a succession process, a real risk exists of encountering this scenario and finding oneself paralyzed. By waiting too long to prepare solid foundations for the business to independently forge ahead into the future, the eventual exit of the founder can mean game over for the organization and its legacy.

Despite knowing that this moment of truth will invariably arrive, we find that founder-led businesses across diverse sectors and geographies are frequently uncomfortable and ill-prepared to see the baton passed on to a new CEO. And no wonder: The founder and the organization’s stakeholders – who so passionately built a thriving organization together over the years – want peace of mind that the business will pursue the ambitions that have been carefully set out, maintain its essence and continue to prosper.

But why wait instead of planning for the next move already? As with any solid long-term strategy, planning for succession should start as early as possible. Letting discomfort cause inaction can result in hasty and ill-prepared succession plans that actually place the essence and viability of the business at risk.

In our experience, pressure to start tackling the delicate topic of succession planning can emerge in diverse contexts and lead to some common concerns. Just to cite a few examples that we’ve seen among clients:

• Our business has just embarked on a new strategic planning cycle, but we’ve hit a roadblock. Without implementing a succession process to keep our decisions on track in the long term, our ambitious strategy of acquisitions and new business pursuits will be seriously limited. As a founder, how can I have confidence that the business will be able to sustain our strategic ambitions in the long term?
• Internal/external factors are forcing us to start thinking about a succession plan. But we see a high degree of risk in bringing on an external professional: This individual may not share the same values underpinning the business, their performance/fit hasn’t been tested out, they haven’t been prepared for this handover nor had time to truly absorb our culture. How do we ensure that a successor will be adequately aligned with the essence and inner workings of the company to ensure longevity?
• We’ve just acquired a company to grow the business and need to figure out who will lead the recent acquisition. Our assessment reveals that the new organization is highly dependent on its founder and may have a hard time adopting a new mindset and interacting with a different sort of business. How do we collaborate with the existing company’s founder-led leadership to prepare the newly appointed CEO and ensure a smooth transition that’s a win-win for both sides?

Yet, all too often, we see business leaders overlook this opportunity. Helping founder-led businesses get a head start on succession planning has proven to offer clear-cut benefits:

• Providing adequate preparation to hand over the baton calmly and with care, thereby avoiding potential ruptures or interruptions in the business
• Allowing the new CEO to already start working and absorbing the essence and characteristics of the company, side by side with the founder
• Preparing the board for the transition ahead and culturally getting the organization ready for the new cycle – benefiting from careful change management that will preserve the essential elements of the business and allow for natural evolution
• Ensuring that the organization has a clear path forward laid out – with a clearly defined strategy, formalized values and ways of working, and a consolidated organizational model and governance

These positive impacts are cross-cutting, offering advantages for the founder, the successor, the stakeholders within the organization and the business itself. In our experience, there are three actions that founder-led businesses can take to capture these benefits.

So, what’s the right moment to start creating a succession plan? The entire succession journey can take years to conclude, culminating on the day the new CEO occupies the full scope of the envisaged role – to the trusting satisfaction of the founder and the organization as a whole. That’s why is so important to start the succession process when the founder is still at the helm and provide ample time for the founder and successor to work side by side.

The most effective succession plans are those that have sufficient time to be developed, starting years (if not decades) before the baton is handed over to the new CEO. Besides allowing the founder-led company to amply reflect on and objectively codify the essence of the business to be passed on to a new CEO, it also avoids the need to make hasty decisions down the road.

There’s no magic formula for succession planning that applies to every type of founder-led business. This means each company should embrace its uniqueness and take guidance from the framework presented here to objectively codify its most essential elements and develop initiatives to effectively hand these over to a future CEO.

The most well-succeeded succession processes for founder[1]led companies avoid checkmate by getting to work well before “d-day” – remaining in the game long term with confidence and continuity. Creating a succession plan doesn’t mean that the founder will stop being the CEO. On the contrary, this individual should remain involved for years to come.

Founder-led organizations can take the eventual succession of their carefully constructed businesses into their own hands, rather than leaving this chance. Just as skilled chess players devise their strategy many moves in advance, we advise founders to realize that the succession process shouldn’t only commence once they’ve decided to leave the company.