MAY/JUNE 2016


Editor's Note FROM THE EDITOR

Transition talk

Have you put business transition on your family meeting agenda? All too often, succession plans are not slated for intergenerational discussion.

The reasons for this vary. Sometimes, the business leader is reluctant to accept that there will come a time when he or she is not at the helm. In other cases, the CEO fears the prospect of conflict erupting if one child is named over the others as the successor. Alternatively, the patriarch or matriarch might not want to break it to the children that none of them has what it takes to guide the business into the future. And then there are those who, despite good intentions, never pull their heads out of day-to-day operations long enough to think about planning.

Whatever the reason, failing to discuss succession openly as a family is a mistake. If you attend a family business conference or peer-networking event, you are likely to hear a successor describe how his or her progress was hampered by the older generation's reluctance to share their thinking about transition.

Such cautionary tales abound. In this edition of Family Business, however, we focus on the positive, by featuring stories of families who benefited from candid succession discussions.

The Smith family, owners of Cedar Rapids, Iowa-based CRST International Inc., put a range of options—even selling the company—on the table. While John and Dyan Smith at first expected that all three of their children would work in the business, they eventually realized that the next-generation members needed to develop their own visions for their careers and their lives. The result was an inclusive conversation that resulted in an ownership plan endorsed by the whole family. The Smiths, pictured on the cover of this issue, are continuing their discussions through family meetings, and understand the likelihood that their plans will evolve.

For the Friedman family, owners of Friedman Realty Group in Gibbsboro, N.J., the succession conversation started earlier than it otherwise might have because of a health event. The result has been a deliberate process during which the business leader and his son have discovered much about their firm and about each other—and have experienced self-discovery, as well.

Tacy Byham, one of the CEOs profiled in this issue by Amy Katz, had an extra advantage. The firm her father co-founded focuses on leadership development, and she participated in its rigorous training system, which tested her decision-making abilities and allowed her to obtain feedback and learn from her mistakes. Her father announced that she'd be taking over two years before she took the helm.

The importance of succession, and family members' strong feelings about the topic, virtually guarantee that some transition conversations will be emotional. But it is better for family members to air their opinions before anything is set in stone than to develop and finalize a plan that is not viable in the long run because it doesn't mesh with the next generation's vision or capabilities.

The secret to a smooth succession, in other words, is to not keep your succession plan a secret.


Copyright 2016 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permission from the publisher. For reprint information, contact bwenger@familybusinessmagazine.com.