Overcoming emotions and conflicts to plan for leadership succession
The influential founder and chair of a multibillion-dollar family company suddenly fell ill. The founder and chair had worked closely with a non-family CEO on a day-to-day basis. Financial performance was deteriorating. The board was concerned about the future of the business and recommended replacing the CEO.
The company’s COO was suggested as the CEO’s successor, although not all board members supported this choice. Without the full support of the board and family, the company had to find additional CEO options. Further complicating matters, the new chair of the board, who succeeded the ill founder, was an inexperienced family member. A controlling shareholder of the company, who was a family director, expected the new chair to be the next CEO.
If this story sounds like a rarity, it’s not — particularly in family-owned businesses, where 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.