Over the past 12 months, one theme has come up in almost every conversation we've had with founders, MDs and CEOs of privately owned businesses in Perth and across Western Australia. It's rarely about recruitment. It's about succession.
"How do I eventually step back without the business depending on me?" "Our leadership team hasn't evolved with the business." "Should we promote internally or bring in someone from outside?" These aren't hiring questions. They're business questions — and the leadership decisions made during periods of transition often have a disproportionate impact on the long-term value of a business.
Founder dependency: the risk that never appears in the accounts
One of the biggest risks in a privately owned business rarely shows up in the financial statements. Founder dependency often starts as the reason the business succeeds — the founder wins the major clients, makes the key decisions and sets the standard. But over time that strength quietly becomes a constraint: every important decision waits for one person's approval, major clients only want to speak with the owner, and growth slows because one person's capacity has become the bottleneck. The irony is that the more capable the founder, the more likely this becomes.
A question worth asking: if you stepped away from the business for three months, would it continue to perform with confidence — or would decisions, client relationships and growth largely pause until you returned?
Why leadership succession planning should start 12–24 months early
The businesses that navigate succession most successfully don't start looking for a replacement when someone resigns. They start planning 12–24 months before a transition is likely to occur. That lead time lets them define what the business actually needs next — not simply replace the person who came before.
The same logic applies to exit readiness. Buyers pay a premium when earnings are sustainable, transferable and capable of growing after the owner leaves. Hiring a GM, COO or CFO shortly before a sale rarely provides much comfort; buyers want evidence the leadership team has already operated successfully without constant founder involvement. That takes time — which is why succession planning creates options and negotiating strength even for owners with no immediate intention to sell.
Your successor shouldn't be a younger version of you
One of the most common mistakes founders make is trying to hire another version of themselves. The right question isn't "who is most like me?" It's "what does this business need over the next five years that it didn't need over the last twenty?" The skills that build a business from zero to $20 million — relentless sales ability, fast decisions, wearing ten hats — are often different from the skills needed to scale, professionalise or prepare for the next chapter. The best succession appointments aren't clones of the founder; they're leaders whose strengths match the next stage of the business.
Executive incentives: reward the future, not just this year
Finding the right leader is only half the challenge. The founder has spent 20 years building an asset they want to protect; the incoming executive is asked to think like an owner but is often rewarded like an employee. That misalignment creates problems — and paying more rarely fixes it. The strongest incentive structures reward outcomes the executive can genuinely influence, balance short-term performance with long-term value creation, and are simple enough that everyone understands how success is measured.
For a genuine successor, incentives should evolve: perhaps salary and performance bonus first, then a long-term incentive tied to enterprise value, and eventually the opportunity to acquire equity — each stage aligning their interests more closely with the owner's. Remuneration works best when it's treated as part of the succession strategy, not something negotiated after the appointment.
Would the right leader choose your business?
Once a business finds its footing, the constraint on growth is usually people — a "who" problem rather than a "what" problem. One exceptional hire can remove a constraint that has limited the business for years. But if that person became available tomorrow, why would they choose your business over every other opportunity in the market? The businesses that consistently attract exceptional leaders can answer that question with something better than salary and "a great place to work".
Succession is stewardship
Succession planning is ultimately about transferring stewardship, not just responsibility. The businesses that get it right attract better leaders, retain them longer, and protect the value the owner has spent decades creating. If you're an MD or owner of a privately owned business thinking about any of these questions, we'd welcome a confidential conversation.