The 10 Pillars of Succession Planning: What Separates Companies That Scale from Those That Stall

In my work helping companies grow, navigate succession, or improve value for exit, I’ve observed that there are 10 interlocking elements that truly distinguish organizations that sustain success vs. those that plateau. If you're a CEO, Founder, or senior leader, getting intentional about each of these will not only strengthen today’s performance, but dramatically enhance valuation and your ability to execute long-term.

Below are the 10 items, what they mean in practice, and why they matter.

1. Strategic Plan

What it means in practice:

You need more than ambition. A strategic plan sets out vision, goals, external environment (market trends, competitors), internal strengths/weaknesses, and explicit priorities over 1-5 years. It’s the map you use to decide what to do and what not to do.

Why it matters (evidence):

A meta-analysis of 31 studies found that formal strategic planning has a moderate, significant positive impact on organizational performance; financial results, effectiveness, etc. (Source: ResearchGate)

Another study highlighted that companies with formal strategic planning are more likely to improve their financial performance. (Source: MDPI)

2. Roles & Responsibilities

Define clearly who is accountable for what: both in current operations and as the business scales. Especially important is defining “G2” roles (second generation, or next level leadership) and growth in roles.

3. Processes and Systems (Playbook)

Dial in your operational playbook: standard operating procedures, systems, workflows. When you scale, you need this playbook so that new people, new G2 leaders, can step into the engine without reinventing wheels.

4. Identifying G2, Roles, and Framework for Growth in Role

Think of succession early. Not just for exit, but for growing capacity and ensuring continuity. Define what G‐roles or second-line leadership look like; what responsibilities they will take on; what competencies will be required.

5. Clean up P&L = 35/35/30 Model

This is your financial hygiene. The “35/35/30” is a simple profit allocation or margin model (for example, allocating revenue across costs, reinvestment, and profit) or something similar depending on your business. The goal is to ensure your P&L is not a mess, that margins are defensible, overhead controlled.

Supporting context:

• Profit margin metrics are well-recognized as crucial indicators of business health. Understanding gross vs operating vs net margins allow you to see where costs are squeezing you and where you can improve. (Source: NetSuite)

• What constitutes a “good margin” is industry-specific, but tracking and comparing over time is essential. (Source: TrueProfit)

• Check out our previous blog article covering the 35-35-30 Profit Model for a deep dive into these concepts: https://eastcoastcoaching.com/post/profit-model

6. Ideal Client & Segmentation

You must know who your ideal client is yet also have a plan to gradually shift your book of business (your client base) toward ideal clients. This involves:

• Segmenting your clients (by size, profitability, alignment, ease of work, future potential)

• Having a strategy to begin introducing more ideal clients

• Using non-ideal or lower priority clients as stepping stones (for cash flow, learning, referrals), then raising standards over time

7. Marketing Metrics

Understand your numbers. Some important metrics to pay close attention to include:

• Internal rate of return on marketing / client acquisition

• Deposit or upfront revenue from existing clients

• Number of new ideal clients added each year

• Number of referrals or introductions required to gain new ideal clients

Knowing these allows you to forecast growth, optimize spend, and avoid surprises.

8. Business Plan

Once your strategic plan is defined, translate it into a detailed, actionable business plan. This is where you get into the “how”:

• Yearly financials

• Budgeting

• Resource allocation

• Investment needed

• Key initiatives by quarter

9. Team Involvement & Alignment

A strategic plan or good business plan that stays in your head or buried in a document does little. Share the plan with your team; get them aligned around vision, roles, responsibilities. This builds trust, accountability, and helps execution. It also allows for course corrections, feedback, and ownership.

10. Quarterly Checkpoints

Set up regular reviews (quarterly is typical) of both strategic progress and tactical execution. Ask: what parts of the plan are we on track with? What’s lagging, why? Are we seeing traction toward what we said we would deliver for the year?

You’ll be surprised how fast you move through your plan when it’s treated as a living thing and not something that gets dusted off once a year.

Why These Matter for Valuation & Succession

You’ll often hear about valuation, share sales, tranches, etc., but these are downstream. Without the steps above, your valuation will be lower, and succession will be messy or delayed.

Here’s how doing these well improves valuation or succession:

• Demonstrates predictable, repeatable performance

• Reduces “owner-dependency” risk (i.e. can the business run without you)

• Increases confidence in future cash flows

• Makes transitions (sell, pass on, bring in new leadership) smoother

• Attracts better buyers, investors or successors

Putting It All Together

If you are leading a business or preparing it for growth / legacy / exit, this is not an optional list. Each item supports the others; each gap creates drag. Here’s a suggested sequence for many firms:

1. Create your strategic plan

2. Clean up your P&L & define roles

3. Segment your clients & define ideal clients

4. Build your business plan & systems/playbook

5. Involve your team

6. Set up measurement & checkpoints

Final Thought

Succession planning is not about hoping the business will grow. It’s about designing growth and value. It’s methodology, discipline, alignment, and transparency.