What are the most common mistakes founders make in succession?
The most common mistakes founders make in succession are starting too late, treating the legal structure as the whole job, never defining what “ready” means, handing over the title but not the decisions, keeping side channels open, and having no clear role for themselves afterwards. Most are failures of the human side: the successor’s authority, the founder’s next role, and what the family agrees out loud.
Founders who build successful companies tend to be good at decisions, risk and people. Succession asks for something different: giving away the thing they are best at, to someone they love, while everyone watches. It is no surprise that capable founders make predictable mistakes. Each of the ones below has a practical alternative.
1. Starting too late
Many founders intend to start preparing the successor “in a few years”, and the few years keep moving. Then a health scare, a market change or simple exhaustion forces the timing, and the handover happens under pressure.
Instead: start preparing the successor one to three years before the expected handover, well before any public step. The reasons founders wait, and what the waiting costs, are covered in why founders delay the handover.
2. Treating the structure as the whole succession
Wills, trusts, share transfers, tax planning and shareholder agreements are essential, and they take real work with good advisors. Once they are done, it is tempting to feel the succession is done too.
It is not. The structure decides who owns the company. It does not decide whether the board, the senior team and the family will follow the new leader.
Instead: treat the legal and financial structure and the preparation of the person as two separate pieces of work, both necessary. The difference is set out in succession planning vs successor preparation.
3. Never defining “ready”
“I will hand over when they are ready” sounds reasonable. Without a definition, it gives the founder an indefinite veto and gives the successor a target they cannot see.
Instead: describe readiness in things you can observe. Do senior people bring the successor problems? Do their decisions stay decided? Can they handle a hard question in the board? How to tell if your successor is ready sets out seven signs.
4. Handing over the title but not the decisions
The announcement is made, the new business cards are printed, and the decisions still come to the founder. The organisation notices within weeks.
Instead: list the decisions you actually make, agree who holds each one, and move them in dated stages. The process is described in how to hand over decisions, not just the title.
5. Undermining the successor without meaning to
Answering questions meant for the successor. Adding a comment after they decide. Reopening a decision a week later. A sigh during their presentation. Each is small and well meant. Together they tell everyone that the founder still decides.
Instead: let pauses happen, redirect questions, and keep disagreements for private conversations. Back the successor in public, or stay silent.
6. Keeping the side channels open
A long-serving executive calls the founder to talk through a concern about the successor’s decision. The founder listens and says they will look into it. Now there are two lines of authority, and everyone knows which one is older.
Instead: stay warm, and send people back to the successor every time. Then tell the successor the conversation happened.
7. Having no clear role for yourself afterwards
Founders who do not know what they are moving towards tend to drift back to what they know: the senior team meeting, the operating detail, the old office. It is not a lack of discipline. It is a lack of somewhere else to go.
Instead: choose a role you can describe in one sentence, such as chair, relationship ambassador, mentor or steward of the family, and agree its edges. The options are covered in what should my role be after I hand over the company.
8. Avoiding the hard family conversations
Siblings who are not the successor, a spouse with a different view, a cousin who expected a role. Many founders hope these conversations will not be needed, or leave them to happen at a family dinner where nothing can be properly discussed.
Instead: hold a deliberate family meeting with an agenda, ground rules and clear decisions, and involve the family’s advisors where ownership or fairness is at stake. How to run a family meeting about succession covers how.
9. Leaving the successor to win over stakeholders alone
Banks, key customers, suppliers and long-serving executives often have a relationship with the founder personally, built over decades. A successor who meets them for the first time after the announcement starts at a disadvantage.
Instead: introduce the successor personally to each key relationship, ideally before any public announcement, and then step back from those relationships on an agreed timeline. The approach is described in winning over banks, partners and customers loyal to the founder.
10. Preparing for knowledge, not for authority
Many successors are well prepared on the business: they know the numbers, the products and the customers, often from years of working in it. What they have rarely practised is leading the rooms that decide whether they are followed: the board, the senior team, the company address, the family table.
Instead: prepare the successor for those specific rooms, using their real calendar, while the founder is still present to support them. A successor who has already chaired difficult meetings and handled hard questions before the handover arrives with authority, not just a title.
A note on what is not on this list
Some mistakes sit outside the human side of succession: an unclear will, poorly drafted shareholder agreements, a tax position nobody has reviewed, no plan for an unexpected death or illness. They matter a great deal, and they belong with the family’s lawyers, accountants and wealth advisors rather than with anyone preparing the successor.
Why these mistakes are so common
None of these mistakes comes from carelessness. Most come from a founder trying to protect something: the company, the successor, the family’s peace, or their own sense of purpose. Starting late protects the founder from a hard decision. Side channels protect old relationships. Avoiding the family conversation protects the dinner table.
The protection is real in the short term. Over the length of a handover, it usually costs more than it saves.
In short
- The most common succession mistakes are about people, not paperwork: timing, readiness, decisions, side channels and the founder’s next role.
- Start early, define “ready” in observable terms, and move decisions in dated stages.
- Back the successor in public, disagree in private, and send questions back to them every time.
- Hold the hard family conversations deliberately, and introduce the successor to key relationships yourself.
- Leave the legal, tax and ownership structure to the family’s advisors, and prepare the successor for the rooms they will lead.
Several of these mistakes are addressed directly in the Second Chair™ method, which ends with a facilitated handover session where founder and successor put their agreements in writing.