Succession is not about who sits in the corner office. It’s about the survival of the business as an economic entity. That means the incoming leader must first attain a body of critical knowledge, and that takes time. The process of succession should begin long before the current leader’s retirement party is scheduled – a complete transfer of control can take up to ten years.
Succession planning should involve the whole family, whose goal should be enabling the business to grow and prosper for the family’s benefit. The current leaders, who may have started the business, must learn to let go of control – a difficult task for many.
Transfer of control is a process, not an event. It requires leaders to think like professional managers rather than entrepreneurs. They must practice their best management skills to ensure a successful process. They should operate from a written plan that includes a timetable for key events and measurable benchmarks. They also need to identify the person who will be held accountable for achieving the desired outcomes.
It’s vitally important to ensure that successors have a solid base of experience away from the family business. They need to be accountable for their performance and know how to handle responsibility and watch the money. Failure to fully understand the financial aspects is a common cause of failure in family businesses.
Finally, the successor who is focused on living well often forgets about minding the store. It is critical to stay focused on feeding the goose that lays the golden eggs, or you could end up dining on burnt offerings.
Does Your Family Business Need Help?
Family Business Matters has extensive experience assisting family businesses. With many decades of experience, we understand the wide variety of challenges that families face as they work together to build, grow and sustain a thriving family business generation after generation. Through conferences, continuing education programs, family business retreats, speaking engagements and private family business consulting services, Family Business Matters has assisted more than 450 family-owned businesses around the world chart their way through family business issues of all shapes and sizes.
For more information on how Family Business Matters can help your family business survive and thrive, please contact us today at (970) 948-5077.