Common Causes of Family Business Conflict & What to Do About Them.
Family Business Mediation Video No 33: Family Succession & Continuity.
By Jon Kenfield. Solutionist.
• This is a big one for conflict! Family succession and associated control of family wealth can be even more confronting than taking over control of the business.
• Loss of family leadership can feel like a loss of relevance and identity.
• Owner has reservations stepping aside, successor is in a hurry to step up. Different speeds and expectations, friction.
• Succession should be a process over long time. Plenty of opportunity for tensions to rise.
• When succession is caused by an event (eg: medical issues) there’s no time to work out the details of what is often a complex transaction. Competing interests + personal insecurities or suspicions create conflict.
• Outgoing leaders require financial security, and releases from liabilities. Need to be very confident before handing over responsibility for future family stewardship. The sense that nobody can manage things as well as they have done is not uncommon.
• Incoming successors need freedom to stamp their personalities on the family after the changing of the guard. The longer the process the more gradual this can be.
Solution:
• Create, negotiate and agree a succession plan, over time, through an inclusive process that takes everyone on the same journey.
• Agree attitudes towards Stewardship and Legacy and formalise objectives, expectations and processes.
• Communicate, communicate, communicate to all stakeholders throughout the succession process.
• Recognise the outgoing’s fear of the abyss & respect its reality. Encourage them top accept a sponsoring role throughout the process – support and encouragement without blocking.