succession

A Plan for Succession

WE’VE ALL BEEN THERE. We’ve all felt the uncertainty at some point in our careers. What’s next for me? What happens if the company were to close? Who is taking over after our owner retires? There seems to be so much ambiguity and maybe even some assumptions. But it’s all speculation. Because no one is actually talking about it. It’s unclear and it’s frustrating. But you’re not alone. Companies every day struggle to put together a future picture. A plan for succession.

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Is The Family Business Right For You?

Joining the family business is a little different than going to a typical job interview. You may have been told from a young age that this is your destiny. Or you may have been told the opposite: that you will have to start small and prove yourself. Either way, there is an idea that because the business is “family” that you may be a part of it at some point. But do you want to?

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We’re Leaves On A Vine

Think of the leaves on a vine as they grow up the side of a building. They’re beautiful. They blossom, they grow, and eventually, your entire building is covered with them. As the autumn season approaches, one by one, they start to turn colors. Some yellow, some red, some brown. So many leaves to admire, and every time we look at them, we think of the beauty they bring. Then they start to fall off. Until only a few are left. What will replace them? Naturally, new leaves blossom and grow in their place. They start out small, and then repeat the cycle.

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Succession Connection

The moment we hear that business leaders and executives are working on (not just talking about) succession planning and building talent depth charts, we are ecstatic! Because the truth is, many talk about it, but don’t put any action behind the words. Sometime in the future, we’ll hear, “Yeah, we were talking about creating a succession plan for that role. We just never got around to it.”

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Lessons from Dad, CEO: Conflict in the Family Business

Lesson Two:  We’re all in this together…believe in one another. A guide to navigating conflict in the family business.

Every family has unique dynamics and each member carves out a role that just seems to fit his/her strengths. Among the many roles, there is usually the role of “person in charge,” the role of “peacekeeper,” the role of “challenger,” and the role of “planner/organizer.” And in some cases, multiple people want the same role; which can cause conflict in the family business. To add to that, the role in the family may not match the position they hold within the company.

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Family Business Matters

The family business is as American as apple pie and the Fourth of July parade. Companies such as Ford, Marriott and Wal-Mart are only a handful of family-owned, corporate giants that come to mind. And although there are more than 100 million family businesses in the United States, only about 30% of family businesses survive to the 2nd generation, and 12% to the third.

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Lessons from Dad, CEO: Hiring Family Members

Lesson One: Every family member earns their position. No free rides. A guide to hiring family members.

Parents are parents forever. That’s a given. As parents, we want to give our children every opportunity to be successful. Why not? We have nurtured them, guided them, and taught them; all in hopes that one day they will grow up, be successful and contribute to society. And we have to protect them. We don’t want any harm to come of them. No hurt feelings, no life setbacks. In that endeavor, as an owner of a family business, we have resources available to us to create opportunities for our children to become successful. And this is an opportunity they may not have in other companies. We’re very good at utilizing all of our resources! So we end up hiring family members.

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Tough Decisions: The Next Generation of Leaders

I was recently asked this question by the owner of a family business with four sons working in the firm: “How do I choose which one will run the business?”

Wow! There are so many ways to answer this question. Family business succession can be complicated. My first response was to ask, “Who wants to?” To which the owner did not know the answer. So that is a good place to start; however, there is more running the family business than just who wants to.

When deciding who should be the next-generation CEO and who should play supporting roles, let’s take a look at a few of the tough decisions at play here.

The owner may be asking several questions: Who can run the business? Who wants to? Do we have the talent? Do we expect that they will want to?

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Should the business stay in the family?

This is a question that most business founders must face at some point in their lives. Family business planning is the process of selecting and preparing the right person to lead the family firm into the future. The average life of a family-owned business is about 24 years, usually ending when the owner/founder retires or passes away. It is reported that approximately 30 percent of family-owned businesses survive the succession from the first generation to the second and only ten percent to the third generation. By 2019, the number of family-owned businesses that will transfer from the first generation to the second will be the largest the world has ever seen.

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The future of your company is NOW!

You have a great management team. They are well trained and provide great leadership to their direct reports. They make great decisions. They are passionate about what they do and there is very little coaching needed to help them reach the company goals. But wait…How many of them will be retiring or leaving your company in the next five years? Have you done any future planning?

Most companies have invested time and resources to develop the leadership team. It probably took years to find just the right mix of diverse thinking, skills, communication styles, and talents. It is an art to find just the right mix. But how long will it last?

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