There isn’t a “one size fits all” approach to effective succession planning of a family business. Understanding the ecosystem is key to aiding families in implementing a plan that fits their particular context. While business growth and sustainability are essential, the biggest concern expressed by patriarchs and matriarchs is avoiding unnecessary conflict that could tear a family apart.
In speaking with our clients on how they are managing their businesses and people through COVID-19, a number of key themes have emerged which we would like to share with you.
Heightened Awareness Of The Obvious: Planning Ahead
We are seeing and experiencing, in real-time, the impact that COVID-19 is having on us both personally and our business.
This situation is a reminder, a wake-up call if you will, of the importance of planning ahead…having your house in order in the event of unexpected events. COVID-19 is a sobering reminder that when we don’t have proper plans in place to ensure the continuity and success of our business, we leave it to fate to take charge. Examples of patriarchs succumbing to illness or worse without having created an effective business transition plan are far too frequent.
Are you taking decisive action in planning the transition of your business to the next generation or group of leaders? Are you identifying the right candidates, developing them for future roles? The simple rule of thumb is that you need 3-5 years, depending on the size and complexity of your business to plan and implement a highly effective business transition plan. PKA has 45 years of experience helping companies in this arena.
Here are some immediate considerations:
- Give yourself 3-5 years to be well prepared for the handover.
- Decide whether you want to remain family-run and family-owned, or simply family-owned with or without a hybrid version of being family-run.
- Identify your future leader candidates, family and/or non-family, depending on the decision taken at #2.
- If you have multiple generations in the business, decide how the family will work together. Rules in the form of a Family Charter are important for creating a respectful workspace for all concerned.
- Use experts who have done this before, and many times over, and who have successfully helped families make the transition.
The steps you take now will determine the road your followers will walk tomorrow. Farmer’s Insurance has a tag line, “we know a thing or two because we’ve seen a thing or two”. PKA believes that this tag line applies equally to us.
Reach out and let’s start the conversation.
Having an initial conversation costs nothing and we are happy to have it.