Navigating emotions in succession planning
In family-owned businesses, multiple factors complicate the selection of a new leader. Issues of founder mortality, the perception that the CEO and brand are inseparable, and assumptions about future roles of family members all intertwine, leading overwhelmed company leaders to delay or ignore succession planning.
Family businesses can benefit from the following guiding principles:
• Start earlier than you think you should. Advance planning provides time to develop people internally as well as to consider external talent that can be brought in and groomed for a higher-level position.
• Articulate what’s important to the family and the business. Given the complex dynamics of a family business, it’s essential to create an environment where everyone feels heard and to facilitate an open dialogue about the future of the company. By understanding the parameters, the family can clarify the tradeoffs and their implications in a robust discussion.
• Define the roles and rights of all stakeholders in the succession process. Defining the role of the ownership group, the current CEO and the board will provide the family a voice while also ensuring clarity in the decision-making process.
• Proactively communicate with the ownership group about succession planning. Letting the family know the timeline for succession, and informing them of the role of the board and the steps in the process, builds trust that the issue is being handled professionally, with the goal of identifying the best leader for the business.