Succession Disputes – As if there weren’t enough challenges already

Succession is the process of generational transfer of ownership / leadership / management / employment from one generation to another.  Standard wisdom is to make this a process, not an event, preferably over a period of years.

Succession usually gains attention when there are reasonably valuable assets involved.  And family personalities and relationships are often involved.  So, where could there possibly be any opportunity for succession disputes arising?

In the corporate world, succession is a reasonably objective process, which is not to say that it doesn’t often get competitive and political.  However, objective criteria, HR recruitment processes, candidate assessments, and a much higher frequency of occurrence makes succession disputes in non-family businesses relatively predictable and manageable, using standard HR and dispute resolution processes.

Things are different in family business land, where succession disputes can be enormously disruptive, for both the family and the business.  Family factors may have taken the place of normal business practices, resulting in some or all of the following issues:

  1. The incumbent leader, or executive, has fossilised, or rusted in place and has no intention of moving. The more senior the individual’s role in the business, the more serious this becomes, as the business progressively fails to meet competitive challenges due to risk aversion and conservative resistance to change.
  2. There is no worthy successor in sight in the family, and nobody is looking anywhere else, because the business “must” be led by a family member. Note: waiting for a new generation to arrive is not a viable solution.
  3. There is an anointed family successor, but there are serious doubts, or possibly a complete certainty, that they are not capable of stepping up into the role. Family members, employees and other stakeholders are all looking on nervously to see what happens, or they leave to go elsewhere before the full catastrophe descends.
  4. There is a battle between two or more potential successors for the job, and there’s no adequate process for either managing their competitiveness, or for making an acceptably rational choice between them.

Possible Solutions for Succession Disputes

A number of measures could help:

  1. Implement a formal succession planning process and get everybody’s’ commitment to abide by the rules and outcomes of the process.
  2. Outsource management of the succession process to an external adviser or agency to take the heat off the family and senior employees.
  3. Appoint a transitional CEO to lead the business for up to 3 years. One of their tasks, reflected in their KPIs for  the period, involves coaching, mentoring and assessing the succession candidate(s) to see if any of them can lift their game to become deserving successors.
  4. Mediate, or otherwise facilitate resolution of the succession dispute between whatever parties are involved: the aged incumbent; the warring siblings or cousins; the unworthy hopeful; the worthy and overlooked employee(s).

Succession is an exciting and dangerous time for change and renewal.  It can herald wonderful generational progress, dreadfully hopeless fears, and everything in between. If there is a succession dispute, it needs to be resolved, as soon as possible.

If you need help with succession disputes, or other issues, please call, or contact: The Solutionist Group.

Leave a Reply

Your email address will not be published. Required fields are marked *