Tuesday, September 12, 2017
For too many families in business, the easiest approach to succession planning is avoidance: do nothing. However, ignoring the inevitable doesn’t make it go away. Ready or not, the time for succession will come.
What makes planning for succession so difficult for so many business families? Reasons families do nothing run the gamut: the senior generation fears letting go; the business is going well and it is too much fun to let go; the business is struggling and the senior generation feels like they have to get it back on track; the senior generation’s belief that the rising generation is not ready or not interested; the senior generation’s indecision in choosing the next leader; the family wants to avoid difficult or awkward conversations; psychological and emotional connections to an identity connected to leading the family business.
Avoidance, or doing nothing, can seem like the easiest option, but is only going to make things more difficult in the future (and probably frustrate the rising generation in the process). Preparing for any change in season takes planning, and preparing for succession is no different. A family business should prepare for the change of the family’s season by taking steps now to prepare:
1. As a family, commit to building the family legacy and the business legacy.
2. Use the workbook: 20 Questions PracticalChecklists For Business Families as a conversation starter for all family members.
3. Draft a written plan, along with a timeline, for the transitions to the rising generation.
4. Prepare development plans for the rising generation that provide opportunities to learn about the values and vision of the family and that provide opportunities to learn about the rights and responsibilities of being an owner of the business.
Honestly discussing the critical issues facing families and family businesses in transition helps foster the objectivity and focus needed for long-term success. Successfully navigating the transition of leadership can often be the key piece in solidifying the opportunity to create a multi-generational family business legacy.
A professional family business advisor can help the family and the business function with discipline and forethought to ensure sustainability for future generations. The family business advisor can help the family achieve family goals by helping to establish the framework, boundaries, training, help with talent development, and reflective planning for the future.
It’s not too late to get started. Doing nothing is not really an option.