One of legendary basketball coach John Wooden’s basic tenets of success was an axiom he quoted almost daily to his players, or for that matter, anyone who wanted to listen and learn.
“Failure to prepare is preparing to fail.”
Since Wooden’s string of 10 NCAA championships in 12 years while at the helm of UCLA may never be equaled, it’s sort of pointless to argue the point about preparation.
His philosophy transitions seamlessly off the hardwood as well. For example, how many long-established businesses collapse shortly after the founder retires or dies? A favorite family restaurant perhaps or a hardware store?
What about a CPA firm?
One of the most critical issues dotting the profession’s landscape is succession planning and if one were to take surveys at face value, it’s a bit unsettling how few firms have failed to prepare.
In January, the AICPA’s Private Companies Practice Section conducted a succession-planning poll and discovered that just 35 percent of multi-owner firms and 9 percent of sole practitioners had some sort of written succession plan in place.
That’s a step up from a similar poll taken four years earlier in which just 25 percent of multi-owner firms and 8 percent of one-person operations had any semblance of formal succession plans.
But back to the present.
The 2008 questionnaire also revealed that a scant 27 percent of firms with more than one principal were not training anyone for leadership posts within said firms, sort of surprising when you consider that more than 60 percent of those same firms expected at least one or more partners to retire within five years.
Recently, the AICPA formed the Succession Planning Resource Center — an online forum — in an attempt to assist small and midsized firms with succession-planning questions and strategies for how their firms should be managed in the future.
Included is information on succession scenarios, i.e. selling, mergers, as well as developing new leaders and transitioning retiring partners.
To be sure, it’s nice to have a resource such as that and one that firms should no doubt avail themselves of should the need arise — and they no doubt will.
But on the issue of succession planning, firms should not have to wait until their professional membership organization creates something to guide them on a critical issue.
But that’s something that should be mapped out long before.
You shouldn’t need John Wooden to remind you of that.
