When your founder, or another key leader, leaves your company, will the show go on like Blue Man Group? Or will your organization suffer fallout like the Prince estate?
Prince died tragically and unexpectedly in 2016. Despite his wealth and success, he didn’t have a will. At the time of his death, he had no spouse or children to inherit his estate. Complicating the situation further, he had several full and half-siblings and was previously married twice. Without any documentation or instructions left behind for who should get what, It took six long years to finally settle the estate !
In contrast, Blue Man Group started as a small artistic collaboration among 3 friends in New York and has grown into a global phenomenon. There are now 70 Blue Men in 5 major cities: New York, Boston, Chicago, Las Vegas and Berlin. Auditions are frequently held to ensure there are always enough Blue Men in the pipeline to keep the shows running. After auditions, Blue Men undergo a rigorous training process to keep the performances consistent with the Blue Man character and continue their 25-plus year run.
Small-to-medium sized business owners are rock stars, too!
They have to be ready to do anything and handle any challenge that comes up. Running a company by yourself or with a small staff requires talent, energy and agility.
Being the rock star of a small or midsize company comes with a risk though. What if something bad happens to the founder of another key leader? Will the team be able to carry on the legacy and keep the company running?
Blue Man Group can teach us a lot about keeping the legacy of company rock stars alive through personal disaster recovery and business continuity planning.
The Bus Number (or the Lottery Number)
The Bus Number is a measurement of risk based on the minimum number of indispensable team members suddenly vanishing, either from “being hit by a hypothetical bus” or to frame it more positively, “winning the lottery” or retiring. Small-to-midsize businesses have fewer staff overall, and therefore a smaller bus number.
Personal Disaster Recovery Planning
As companies grow, improving their cybersecurity posture through activities like Disaster Recovery and Business Continuity Planning is a common practice.
Working through these plans gets teams thinking about unexpected events that might harm the business. It’s important for leaders to consider their personal disaster recovery and business continuity plans, too. Business founders need more overlap between personal and business estate planning.
How do you plan for potential unexpected absence, illness, or death of company founders and key personnel? As a company grows, it can be difficult to let go of the habit of running a company with a sole proprietor mindset. Below are some areas to plan for that can easily fall through the cracks.
The Founder as the Face of the Company
Companies would not exist without their founders, they win over initial customers and get others excited about their fledgling business. Founders remain the “face” of the company as it grows. What is the process if something happens to the founder? For example, they likely have an emergency contact on file with your company, but does their emergency contact know whom to contact at your company if something happens to them outside of work?
Recommendations:
Founder or executive personal social media accounts tied to company social media accounts should have a legacy contact added or emergency backup person assigned.
An emergency communication plan should be created with information about how to communicate an unexpected emergency event, what level of detail to share, who will serve as liaison to the family and manage and approve messaging.
The Founder as the Financial Centerpoint
Founders secure initial funding for a company and are typically the first accountant. As the company grows, finance personnel should take on more of the day-to-day account management. However, some accounts can go overlooked for years beyond the growth phase.
Recommendations:
Confirm business bank accounts have a co-owner or secondary signer.
Inventory and review other business accounts and vendors to ensure vendor representative contact information is documented and all have backup payment coverage.
The Founder as the Sysadmin
In startup mode, the founder often sets up initial IT processes and rolls out staff laptops. Many early devices may still have the founder’s account information with no backup. Some processes and accounts may still be locked entirely to the founder, too.
Recommendations
Ensure the company password manager has a backup administrator.
Inventory all sysadmin accounts to ensure a backup has been assigned.
Inventory one-off “shadow IT” accounts for apps used by a single staff member.
Undocumented Processes and Personal Overlap
Undocumented business proceses are a key risk in personal business continuity planning. It’s a general best practice to avoid having a single point of failure for any process or project. Unfortunately, the founder is the only one in charge of many tasks and processes – unless action is taken to hire, train, and delegate tasks to new owners.
Recommendations:
Document critical business systems or processes that are “only in someone’s head.”
Move critical business documents stored only on a founder’s personal computer or in their home to secure company storage.
Review founders’ will and estate planning to confirm it includes wishes for the business and has been communicated to their family or loved ones.
Review personal and business insurance coverage with your agent to ensure potential gaps are covered.
Create a succession plan.
Periodically check that any emergency backup assignments are still correct. (e.g. the backup has not left the company)
Set calendar reminders to review your plan. (at least annually)
Conclusion
After identifying personal disaster recovery and business continuity needs, review them with legal counsel. They should be reviewed annually along with Disaster Recovery and Business Continuity plans to ensure they are up to date.
Most businesses will have some unique needs in addition to this list. Some of these will come up organically during the planning process. Another way to identify them is to track what questions come up when key personnel are out of the office.
If you’re a senior employee and see that a founder, CEO, or other key role has not standardized operations and therefore carries this risk, it’s well worth talking to them about it. Besides securing the company’s future, standardizing processes will reduce the founder’s workload and help the company scale better.
If you are a founder and want to start this process, the creation of a personal will or estate plan, or updating your existing plans, is a good place to start. The Conversation Project and Five Wishes are resources that can help ease into end-of-life discussions. The book Difficult Conversations by Douglas Stone, Bruce Patton, and Sheila Heen provides guidance for broaching additional discussions with your family and team.
Thinking about unexpected personal health issues or disasters is never easy. Having a plan in place can bring family, colleagues and customers peace of mind in an untimely or unexpected event. On a more positive note, adding personal Disaster Recovery and Business Continuity planning has the added benefit of creating additional rock stars at the company to support the leaders and increase effectiveness for everyone.
The show must go on!
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Header image taken by 7beachbum, used under the CC BY 2.0 License | Image was cropped.
