Pavlo Phitidis urges founders to delegate before succession

Business owners planning a sale or family handover should begin transferring responsibility well before relinquishing ownership, argues Pavlo Phitidis, warning that dependence on a founder can undermine the value available on exit.

What happened

Writing in Elite Business, Phitidis challenges the assumption that succession planning starts with choosing a future owner. His analysis puts the development of a business capable of functioning without its founder ahead of decisions about who ultimately holds the shares.

He identifies four areas of succession: operations, management, leadership and ownership. The proposed order matters because a change in shareholder does not, by itself, equip other people to deliver the work or direct the company.

Delegation is central to that approach. Rather than treating it simply as a way to reduce an owner's workload, Phitidis presents it as the means of spreading expertise and accountability throughout an organisation.

Responsibilities that repeatedly fall back to the founder reveal where that transfer remains incomplete. Those weak points can constrain expansion while the owner is still involved, as well as creating difficulties when they want to leave.

The background

The analysis considers three possible destinations for an owner-led business: a transfer to the next generation, a sale to its management team or an acquisition by an outside buyer. Each requires the organisation to retain its ability to perform after the founder steps away.

A long trading history does not necessarily establish that independence. Phitidis describes businesses built over decades where customer confidence, staff support and major commercial relationships remain concentrated in the owner.

That concentration creates a different assessment of value for a prospective purchaser. The founder may see the results of years of work; the buyer must judge how much of that performance would survive their departure.

What people are saying

Phitidis argues that operational succession requires working methods to become accessible to the wider team. Documented procedures and explicit service standards should allow staff to deliver reliably without drawing on knowledge held only by the founder.

For managers, the requirement extends beyond taking on additional tasks. They need access to performance information, permission to act and the confidence to supervise colleagues and address shortcomings without referring every important decision upwards.

Leadership succession addresses a separate question: who will determine the company's direction? Phitidis says that responsibility includes strategic choices and setting milestones over three to five years, so that the organisation continues working towards longer-term objectives.

His assessment of buyer risk rests on uncertainty about continuity. Where important decisions or relationships cannot be separated from one person, a purchaser has less assurance that the business will sustain its results under new ownership.

He also places the consequences beyond the seller's eventual proceeds. A company that continues after its founder leaves can preserve service for customers, opportunities for employees and commercial relationships with suppliers, while continuing to support its community.

What happens next

For owners considering succession, Phitidis proposes assessing the capabilities already present in the team before settling on a preferred recipient or buyer. The immediate test is whether anyone else is equipped to run the company, rather than whether someone is willing to own it.

The work is intended to take place over years, not during the final transaction alone. Under his approach, an ownership transfer follows the development of independent operational delivery, effective management and strategic leadership; it does not substitute for them.