Identifying a successor
An important factor when choosing a successor is establishing what qualifications and experience you expect them to have. However, making that decision based on academic merit or IQ alone could have a potentially disastrous impact. Business success requires having both good management savvy and excellent interpersonal skills.
A key characteristic to look out for in a potential successor is whether they have an appetite for constant learning. Do they have the humility to recognize that they may still have a lot to learn? Development is an ongoing process, and business leaders need to constantly adapt and draw on the skill and knowledge of those around them. An important factor when choosing a successor is establishing what qualifications and experience you expect them to have. However, making that decision based on academic merit or IQ alone could have a potentially disastrous impact. Business success requires having both good management savvy and excellent interpersonal skills.
Dealing with Entitlement and Strained Family Relationships
Conflict around succession occurs amongst next-generation family members where there are underlying issues impacting family cohesion. Friction within a family organization is often a result of the absence of a shared purpose (Castoro and Krawchuk, 2020). Each potential successor may believe that they can run the business and pursue their agenda. Further complications arise from factionalism when spouses or other family members pick sides, believing their candidate is entitled to a role.
Business decisions may be a source of conflict that impacts family relationships, but the reverse also happens. Family tension, which has no business basis, can end up affecting the organization. Bringing in a neutral party, with expertise in family succession planning, can maintain objectivity and facilitate clarity in decision-making.
Transitioning and Senior Non-Family Members
When next-generation leaders transition, the way they engage with senior non-family members inevitably changes. Non-family members can add tremendous value to an organization (Fernández-Aráoz, Iqbal and Ritter, 2015) and are more readily able to distance themselves from internal family tensions. However, if your goal is to avoid resentment escalating, the change of relationship resulting from succession needs to be handled sensitively.
For more than 40 years, PKA has worked alongside respected business leaders, helping navigate the process of transitioning their business to the next generation.
To find out more about how we can assist your business, be sure to reach out.
Castoro, A. and Krawchuk, F., 2020. 4 Tensions in Family Businesses — and How to Work Through Them. [online] Harvard Business Review. Available at: <https://hbr.org/2020/05/4-tensions-in-family-businesses-and-how-to-work-through-them> [Accessed 12 April 2021].
Kennedy, L. and Pulvermacher, G., 2020. Succession Planning – Building Business Legacy While Maintaining Family Relationships | PKA. [online] PKA. Available at: <http://pulvermacherkennedy.com/succession-planning-building-business-legacy-while-maintaining-family-relationships/ [Accessed 12 April 2021].
LIU, S., 2019. Why the Power of Mentoring can Change the World. [online] Ted.com. Available at: <https://www.ted.com/talks/shirley_liu_why_the_power_of_mentoring_can_change_the_world> [Accessed 12 April 2021].
Fernández-Aráoz, C., Iqbal, S. and Ritter, J., 2015. Leadership Lessons from Great Family Businesses. [online] Harvard Business Review. Available at: <https://hbr.org/2015/04/leadership-lessons-from-great-family-businesses> [Accessed 12 April 2021].