Family business succession should be a process and not an event, because to have any reasonable prospect of success, it needs be planned and executed over a sensible period of time, like any other complex project.
4 Stage Succession Planning Process
The following diagram summarises the individual process stages that make up a comprehensive succession plan:
- Information gathering and context setting.
- Situation analysis, process planning and candidate selection.
- Candidate training, grooming and monitoring.
- Implementation and handover.
The detailed task listing has a sequential flow, although many tasks can be undertaken concurrently. Despite looking quite complicated in all its diagrammatic glory, each component is relatively straightforward when the process is approached knowledgeably, systematically and with enough time available to address each task and issue calmly. Using an experienced and independent facilitator to guide the process can save a lot of time and grief.
4 Stage Succession Planning Process
1. Background | 2. Evaluate | 3. Plan | 4. Implement |
| Family & Business | Family & Business | Business Only | Business Only |
| Preliminaries: – Identify need for succession process – Appoint team to manage process Identify: – Key objectives – Background facts – Values, visions & goals – Plans (existing) – Major issues, needs & challenges – Resources available – Timing issues and requirements – Candidates – Profile & style of current leader. | Assess: · Plans & goals (viability & congruence) · Health & stability · Support resources · Available candidates · Congruence of individual & collective values, visions & goals · Impact of staff · Impact on other stakeholders · Impact on Family (immediate & remote) · Timing imperatives & practicalities. 1. | Plan: – Succession objectives – Key criteria – Candidate criteria – Decision making process – Selection process – Communication protocols & process – Development program (successor & successee) – Transition program (successor & successee) – Monitor & measure procedures – Feedback process – Modification process – Contingency plan. | Implement: · Select & anoint candidate · Announce choice · Implement agreed development & transition programs · Monitor, assess & respond to successor performance · Monitor, assess & respond to successee performance · Evaluate progress at key milestones · Accept/reject chosen successor · Handover ceremony.
Complete |
10 Essential Wisdoms for Successful Succession
- Do make succession a controlled process rather than an event.
- Do be professional, not protectionist. Provide objectivity, independence and impartiality for the sake of your business and for those whose lives depend on it.
- Do recognise that there are always other options. Search and think inside and outside the square.
- Do appoint someone to be a long term steward, rather than an owner, of the business, its people and its values. Their motives for seeking the role should place business continuity above personal gain.
- Do respond to the old leader’s fear of the abyss. When the business has been their life, moving out of it is like stepping into the void. Help to ease their move.
- Do work out how much is enough? How much money does the old leader need to be financially secure for the rest of their days? Let the balance go if it will help the succession plan and create sustainable harmony in the business and/or in the family.
- Don’t just search for or try to create a clone of the current leader – the successor should stand on the old leader’s shoulders, not just fill their shoes.
- Don’t demand a 60 year old’s behaviours and values from 30 year old candidates. Exchange safe horizons for credible, 20+ year visions for growth and prosperity.
- Don’t ‘hand over the reins without getting off the horse’. Don’t demand responsibility without giving authority and ownership, however you stage the process.
- Don’t surrender your business and family timing objectives purely for tax/wealth benefits. Weigh personal gains against financial pains, and then go with what feels right – according to your personal values.
If you need help with succession planning, or other issues, please call, or contact: The Solutionist Group.