Manage for Success: Succession Planning, Newsletter #117, May 2011

"Manage for Success" is a free monthly newsletter for record label executives who want to operate their companies efficiently and successfully. It's published by Keith Holzman of Solutions Unlimited, a management consultant, troubleshooter, and trusted advisor, and is based on his many years as a senior executive in the music industry.

Copyright 2011 by Keith Holzman, Solutions Unlimited. All rights reserved.



I spent seven days over two weeks performing my civic duty as a juror on what was ultimately a rather dull case and a personal waste of time. But the enforced period away from my desk had me pondering a number of things, and I'm writing about one of these in this newsletter.

For instance, what might happen to your label if something critical happens to the owner? Does his or her estate planning include who should run the company in the event the leader is ill or incapacitated for an extended period of time? Who would own the label in the event of his death? Who might run the label during a brief absence, or during a more extended period? Finally, what happens to the label’s assets and who takes on its liabilities in the event of the owner’s demise?

Most indie label owners are young or just approaching their middle years and haven't put much thought to what could occur. Most young people consider themselves invincible and believe nothing critical could happen to them. But I've known of a few occurrences where a succession plan had not been instituted and a label owner died unexpectedly. In some of these instances, at least, the labels were bequeathed to the owner's significant others in a recorded will. But I know of at least two cases where no plan had been written as to who would run the company in the event of such a catastrophic occurrence.

At one company the owner's family attempted to run it themselves, but with little knowledge of the unique problems of the industry they were ultimately not very successful, and the company was sold off for "parts."

In another case, the owner's family looked very carefully at its existing staff, weighed the strengths of each employee, and eventually chose a successor from within. This proved to be a smart decision and the label has thrived under difficult times.

Does your label have a properly thought-out succession plan? Does the principal know who should run the label if he becomes incapacitated -- even for a short time? Has the owner developed a thoughtful estate plan that clearly indicates who might inherit it and what he or she wants done?

This all might seem lugubrious, but it's a vital and necessary exercise.

So if you need assistance forming your plans for your company's future, please contact me to see how I can help. I've had experience at this and the outcomes were very successful.

Until next month,

Keith Holzman -- Solutions Unlimited

Helping Record Labels Manage for Success.


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Copyright 2011 by Keith Holzman, Solutions Unlimited. All rights reserved.