Coming up with a good process and solid plan for succession is probably one of the most important duties of a family business leader. I get to work with many professionals in the field of family business consulting. They come to me and ask for advice on how to help their family business clients.
Here’s a quick list for you to follow:
We are just wrapping up a succession process with a family that we mapped out five years ago. I’m shocked how quickly that time has passed. Everyone thinks, “I’ll get to it someday,” but the reality of the situation is that time passes quickly. This is a very important project, so get started early!
Ask the Business What it Needs
What I mean by that is to step back and think of the family business as a person. Think, what does the family business need going forward? Too often the family starts succession planning by thinking about their family members and what will work best for them. What you should be doing is asking, what does the family business need at this point in time?
There will be some bumps in the road of succession. Plan for it and don’t be overly rattled when it happens. That’s another reason to start early. It’s like when you are headed to a very important appointment, you leave early enough so if you hit a little traffic jam or take a wrong turn you can still adjust and get there on time.
Get Professional Help
Most businesses don’t try to do their own taxes. They hire professionals who prepare taxes all the time. Professionals help navigate you through the process in a way that will save you a lot of time, money and mistakes. I know you think you know what’s best. Yet family business consultants have handled a large number of these projects. They can guide you in a way that could help you avoid potentially harmful damage.
Let Somebody Else be the Bad Guy
It’s one of my favorite roles. I have two thirty something children. I can imagine how incredibly difficult it would be to look them both in the eye and choose one of them over another to take on an important role in the family business.
An outside adviser, who is knowledgeable in leadership and business management, can make unbiased recommendations about who is best suited for what role. You get to sit back and look like a hero for being smart enough to bring in the resource and avoid the stomachache of having to deliver the news.
Stay Too Long
I’ve got a family right now with a 75-year-old father and a 40-year-old son and daughter. Dad is still convinced that he is the only one that can make decisions. In the meantime, his son and daughter are rotting on the vine missing their opportunity to be building their lieutenants and their leadership brand within the company and in their industry.
Don’t get me wrong, I have no problem if you (Mom or Dad) want to continue to come to work to be connected to the employees and the industry. Set up a role that allows you to still make a contribution but you don’t have to be the pilot. Being the pilot is doing a great disservice to the business and the young eager pilots in training.
Shoot from the Hip
This is one of the most important things you can do for your loyal employees and your family. You need to be thoughtful, thorough and professional as you navigate your way through this. This is not the time to play Lone Ranger and hope it all works out. There is too much at stake.
Put All Your Eggs in One Basket
I’ve seen too many times where everyone’s convinced this one person’s the right future leader. However, when they are put in the pilot seat we find out some pretty startling things. You need to have backup plans and a team of people to run your company. Sure, you were the Lone Ranger when you started the company, but most times in today’s world a leadership team has a better approach.
Exclude Key Stakeholders
You need to involve all of your stakeholders; your vendors, your employees and your family members. It’s so important to give them a voice in the process. That doesn’t mean that they have the final say, but it will help them buy into the plan after you included them in the process.
It has taken a lot of courage and determination to get your business to this point. I’ve watched as this topic has literally frozen some of the most brave business leaders that I know. They say to me, “I’m really afraid that if we start asking questions to get the process going we will get stuck and won’t know what to do!” You need to have the courage and trust that if you put the right process in place and bring the right professionals to the table, you will have a successful outcome.
The Bottom Line
The 75-year-old dad in an unhealthy sort of way is creating his own self-fulfilling prophecy. He’s kind of creating a situation in which he’s going to look at all of us and say, “See, I told you no one else could do this good as I can!”
I keep trying to tell him that’s going to be an epic failure on his leadership. What would make him a hero is to be able to point to the great team of leaders he helped put in place to lead the business and the family into the future.
Get started soon and get help!
Pete Walsh is a demanding, courageous and playful Master Coach in Phoenix, Arizona. He is the founder of Peak Workout Business Coaching and the Family Business Performance Center. He can be reached at email@example.com.