Something has to change. The question is what.

The business is sound and the numbers hold. Even so, for many chief executives, founders and managing directors, the sense has been building that something has to change.

It rarely arrives as one problem. It arrives as weight: costs that keep rising, a board asking harder questions, a successor still unnamed, competitors nobody tracked two years ago, a team stretched further than it was built for. Add global politics, regulation, technology and shifting expectations from staff and stakeholders. Each is manageable. Together they are heavy, and the person in the chair often carries them alone.

Three markers are closing in

The pressure was already there. Three hard markers now give it a date.

The tax line. From 1 July 2027 the capital gains tax rules change for individuals, trusts and partnerships. Uncertainty over the changes and their implications is challenging investment decisions.

Capital. It is on the move. At a cash rate of 4.6 per cent, a 15-year high, it is also selective. The question for any business is whether it is competitive for it.

Inflation. Underlying inflation is running at 3.6 per cent, above the Reserve Bank's target range, and it is pressing on costs.

Set against one another, the three narrow the room to wait. Succession, weighed for years in many founder-led businesses, is the decision they are most likely to bring forward.

The call

Something has to change. What changes comes down to three paths: carry the risk and grow alone, bring in a partner, or exit.

Each asks something different of the organisation. Going alone needs the depth to carry the growth. A partner needs a business that others can read and trust. An exit needs value that stays when the owners leave.

Private companies weigh more than the number: their people, their customers, their IP and their name. Who looks after them under each path is often what decides it.

Every answer is different. The burden of the call, and the hindsight that follows, sit with those in the leadership chair.

Where it shows up

When the business is growing

• An acquisition is fundable, and integration would fall to the people who run today's operations.
• A new market or product line is ready, and the leadership team is at capacity.
• New capital is available, and investors will want to meet the team behind the chief executive.

When the business is exposed

• The board asks about succession, and the answer names one person, or none.
• Key customer, lender and regulator relationships sit with two or three individuals.
• An approach has arrived, and the board is yet to settle a view on value and timing.
• Competitors are moving, established and emerging, and the response would fall to the same few people.

Both lists describe the same condition. Ambition, depth and appetite are out of step.

Four questions for the board table

1. Which of our growth options is limited by capital, which by leadership capacity, and which by our own appetite?
2. Would an investor hear one strategy across the organisation?
3. How much of the value a buyer or investor would pay for sits in the organisation, and how much in two or three people?
4. Is the business using the position it holds, or are we leaving value on the table?

The answers set the agenda. A limit of capacity calls for depth before capital. A limit of appetite calls for a settled view among owners and the board before either.

How depth gets built

The call sits with the chair. The work of getting ready for it can be shared. That is what depth is for, and it is being priced: 61 per cent of chief executives and directors expect succession planning to carry more weight in company valuation within five years.

There are three routes, and most businesses use all of them.

Develop. Promote and stretch the people already inside. It builds the most durable depth and takes the longest.

Hire. Bring in a senior executive. A search takes months to land, a full cycle to prove and longer to build trust.

Borrow. Bring experienced operators alongside the leadership team for a defined piece of work: a growth plan, an integration, preparation for investors. It adds capacity at once and, done well, leaves capability behind.

The judgement is in the mix and the sequence. A business facing a valuation, a transaction or a growth step within twelve months usually needs the third to make time for the first two.

Before the number

A number will follow, at 30 June 2027 or at a transaction. It will record how much of the value the organisation holds and how much rests with a few people. The judgement, and the preparation behind it, come first.

Woodroyd works alongside boards, chief executives and founders on decisions of ownership, growth and capital.