Common Causes of Family Business Conflict & What to Do About Them.
Family Business Mediation Video No 32: Business Succession & Continuity.
By Jon Kenfield. Solutionist.
• This is the big one for conflict! Business leadership succession, and a perceived transfer of associated family leadership, can be enormously confronting, especially to leaders and driven entrepreneurs who’ve never before considered being anything other than the leader.
• The outgoing leader has reservations about stepping aside, while the incoming successor is in a hurry to take over. Different interests, expectations and capacities for change, friction.
• Succession should be a process over a long time, rather than an event. There’s lots to do in something as complex as a business, which means plenty of opportunity for tensions to rise.
• Outgoing leaders require financial security and releases from liability. They also need to be very confident when they hand over their baby.
• Incoming successors need freedom to stamp their personalities on the business – this can be a dangerous time – when risks are taken to make a point, whether they’re recognised as such, or not.
• Changes in staffing, including old retainers and advisers, are common, with a consequent loss of corporate knowledge and wisdom. If the outgoing leader has made personal promises that aren’t communicated, or aren’t kept, resentments can rise.
• Changes to fundamental business systems can have the effect of making the old leader a stranger in their own home.
Solution:
• Create, negotiate and agree a business succession plan, over time, as part of the business strategy plan. Use an inclusive process to bring everyone on board.
• Communicate, communicate, communicate to all stakeholders throughout the succession process.
• Recognise the outgoing leader’s fear of the abyss & respect its reality. Encourage them to accept a sponsoring role throughout the process. No blocking.