Succession Planning & Jay Leno
Tonight is Jay’s last show as the Tonight Show host. NBC could have possibly done a smoother job replacing Jay Leno, and possibly not, but it appears he does not want to go.
Jay is going out at the top. This is also the second time he has been replaced. The first time with Conan seemed ill-conceived, did not work out too well for his bosses, but seemed to work out ok for Jay since he went back to what he was doing without any noticeable loss of viewers or advertising revenue. This time, it seemed better planned and he looked like he had a good time with his friends on the final shows joking about his leaving. This is also a lot better than when he replaced Johnny Carson who, was so upset, that he refused to appear with Jay on any of the final shows.
One might ask… why replace someone at the top? Well, this is show business, with business emphasized, and NBC feels it can better attract a younger viewer with Jimmy Fallon. NBC also doesn’t want to lose Fallon and needs to step him up to the next level – which means bye-bye to Jay.
Many businesses have these same problems. There needs to be room to move up younger people and when the older people are reluctant to step aside, they either have to be given a push or the business risks losing the young’uns.
Many entrepreneurs seem to be exceptions. Their identity is immersed with the business and, for many of them, inseparable. Retiring or stepping aside is unthinkable. So, what happens then? The business goes on and on and on, but without new blood and much growth, and at some point the value created diminishes or vaporizes. That is usually ok for them since they have what they want – their power base, identity and a place where they rule the roost. But, suppose it is not what the other stakeholders – family, key management, loyal employees and suppliers – want or need? Isn’t there some responsibility to them?
Actually, it is possible for everyone to be satisfied, but it will require some work. It will need a sound succession plan integrated with a financial plan for the owner’s family and the recognition by the owner that things change, including his or her getting older and the probability of the business being able to continue after he or she is no longer there – either by choice, death or sudden disability. Having the plan does not mean that it has to be implemented orthat it has a start date.It will, however,go a long way to help put things in order, offer perspective, provide a reality check and aid in confronting the inevitable.
There are few guarantees but two of them are 1) death and 2) the benefits of having a plan (even when there is no intention of implementing it.) We don’t like to talk about the “D” word… but, we can help immensely with organizing a plan. Many CPA firms including mine have a team of people that can help with the plan. Call me and find out how to get started. Really get started!
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