Contingency planning is important, but difficult to get excited about.
Consider the true story of a man (we’ll call him John) who built a healthcare business from nothing into a $300 million conglomeration of facilities and operations in 6 different states. At age 58, at the behest of his persistent family business consultant, he developed a simple, three paragraph contingency plan that outlined his wishes should he pass away unexpectedly.
Essentially, the plan called for John’s wife (we’ll call her Lynnette) to take over as the interim CEO of the company for a period of 12 – 18 months while his most trusted advisor (Steve) started the process of selling the company to a strategic buyer. Though Lynette protested, arguing that her lack of management training and experience would potentially hurt the company, John was adamant that her main priority would be to cradle and protect the culture that he’d worked his entire career to build.
It didn’t seem to be a point worth arguing much about – after all, John’s father had lived to be 84, so his exit did not seem the slightest bit imminent.
Two years later John died tragically of a heart attack at age 60.
Once the shock of John’s passing became bearable, Lynette and Steve put in motion the steps outlined in his contingency plan. She took over as interim CEO, and did a fine job. The employees rallied around her as their new leader, buoyed by compassion for her circumstances and human decency.
Steve contacted strategic buyers and let them know of their intent to sell. A deal was struck and consummated within the 18-month window that John had identified in his plan. The proceeds, coupled with solid estate planning already in place, provided a solid financial foundation for Lynette and their family.
Now, many years later, Lynette is able to pursue personal goals and activities thanks in some part to a simple, three paragraph contingency plan.