A comprehensive new study from the American Society of Interior Designers (ASID) reveals a significant gap in succession planning across the interior design industry, potentially threatening the longevity and stability of many established firms.

The report, titled "Designing A Succession Plan: Insights for Firm Owners," found that only 30% of mid-sized firms (25-40 employees) have succession plans in place. Even more concerning, just 12% of small firms (2-10 employees) and less than 5% of sole practitioners have developed strategies for leadership transition.

"Succession planning is not just about leadership transition—it's about safeguarding a firm's legacy, culture, and future success," said Khoi Vo, chief executive officer of ASID. "With this report, ASID provides firm owners with the critical strategies and insights needed to navigate ownership transitions with confidence."

The research, conducted in partnership with Greenway Group, a consulting firm with over 30 years of experience advising design businesses, identifies two key factors shaping the succession planning process: the emotional challenges owners face when considering transition and the complexity of succession itself.

Changing generational expectations present additional challenges. According to the report, younger professionals increasingly prioritize work-life balance and specialized expertise over traditional management paths, creating a potential leadership vacuum as fewer qualified candidates pursue these roles.

Small design practices face particular difficulties due to their limited talent pool of potential successors and fewer resources to dedicate to succession planning, such as hiring external consultants or providing leadership development opportunities.

To address these challenges, the report outlines six essential transitions that should occur for successful leadership handover:

1. Mission and values alignment between successors and the firm
2. Knowledge transfer of business-related skills and competencies
3. Transition of key client and industry relationships
4. Gradual delegation of decision-making authority
5. Shift from project work to firm leadership responsibilities
6. Implementation of a financial exit strategy

The report also explores various exit options for retiring design firm owners, including mergers, asset sales, and internal ownership transitions.

"Whether passing the torch to internal staff, selling the business, or preparing for new leadership, proactive planning is essential to ensuring stability, preserving client relationships, and strengthening the next generation of design leaders," Vo added.

The report is now available for both ASID members and nonmembers through the organization's website.