Don’t Leave Your Family’s Future to Chance!
As the leader in a family business, you already know that succession planning or eventual transition is somewhere on your horizon. There’s no getting around it. It may be looming directly in front of you. It may be somewhere far enough down the road that you haven’t given it much thought. If either are true for you, keep reading.
The truth is, ensuring a smooth transition of leadership is a long-term project. Preserving the legacy of your company for future generations and stakeholders begins long before most families think it does. Beginning your pre-succession plan even five to ten years before the transition of leadership is ideal. Yes… five to ten+ years early.
Let’s use the example of owning and eventually selling a home. Most of us would consistently maintain and improve a home we eventually intended on selling. Preparing your family unit, individual family members, leadership, operations is no different. Beginning years in advance is crucial to a peaceful and seamless transition. It ensures that when succession time comes, you will not be in a state of acute crisis. A state where critical decisions are left unmade, with a company or leaders who have little or no direction.
The time will come– whether you are prepared or not– and in many cases it comes unexpectedly. By successfully navigating a pre-succession stage, you have the time and space to ensure that the business is profitable and running smoothly and efficiently. You will have the right people in the right seats. The individuals in your family will be fulfilled and have a clear view for their future. There will be clarity around governance and decision making, and more.
Here are a few of the key areas we look at in the pre-succession stage.
Clarifying the unique vision of your family’s individuals and the collective vision.
Your family’s ultimate joy and fulfillment should be made a priority, alongside the continuity of the business. Clarifying visions allows us to take a deeper look– and perhaps widen our definition– of what stewardship of the business means. Stewardship can look different for everyone in the family, whether they are involved directly in the business or not. By having the right family members leading the business, who truly want to be there, you increase productivity and efficiency within your organization.
This also ensures that your business is moving in the right direction and that everyone is on the same page. Additionally, a clear vision can help to foster a sense of unity and teamwork among family members. This unity leads to increased job satisfaction and employee retention. Furthermore, it can also ensure that your company is aligned with the long-term goals of your family. This way, everyone is aware of the direction the business is heading. A sense of purpose and direction for your family and business helps keep everyone focused and motivated.
Evaluating your sales process.
In pre-succession work we cannot forget the impact of evaluating your current sales process. This includes analyzing the effectiveness of the sales team, identifying areas for improvement, and ensuring that the sales process is aligned with the long-term goals of the business. By taking the time to thoroughly assess your process, you can ensure that the business is well positioned for success even after the leadership transition, and in a strong position if you decide to sell.
Evaluating your leadership team.
Another important aspect of the pre-succession stage is evaluating and developing your leadership team. This includes identifying key leaders within the organization who are capable of taking on more responsibility in the future. It also means clarifying their own personal visions for the future, as well as identifying any gaps in leadership that need to be addressed. By building a strong and capable leadership team, you can ensure that the business has the necessary talent to continue thriving after the transition.
Assess Next Gen is a powerful and concise tool that we use to evaluate and develop Next Gen family business leaders. Click here for more info.
Evaluating your operations.
We all know that the efficiency of your operations has a significant impact on the overall success of your business. By taking the time to examine the efficiency of your company’s processes and identify areas for improvement, you can ensure efficiency even as leadership changes.
Additionally, evaluating operations can help to identify any potential roadblocks or challenges that may arise during the succession process. This allows you to develop strategies to overcome them. By taking a proactive approach to evaluating operations, you can ensure that the business is well positioned for success even after the leadership transition.
Evaluating your family governance structure.
In a family business, the governance structure plays a critical role in the success of your company during any succession or transition process. If you find yourself at the doorstep of a transition without clear governance in place, it can open the door for lots of tension and buried resentments around decision making. You are faced with a murky path forward. When we look at assessing and establishing family governance, we look at the roles and responsibilities of each family member. From there, we can make any necessary changes to ensure that the governance structure is effective and aligned with the long-term goals of the company. Without clarity in this area, critical decisions are often kicked down the road or not made at all.
Evaluating the culture of your company.
It is crucial to work on your company culture years before a succession in your family business for a number of reasons. Culture change doesn’t happen overnight. It is the long game. The culture of a company can have a significant impact on employee morale, productivity, and overall success. If the culture is not supportive of the business’s long-term goals and the transition of leadership, it can lead to a decline in employee engagement and performance. Additionally, the culture of a company can play a role in attracting and retaining top talent, which is essential for the long-term success of the business.
Healing relationships and promoting healthy conflict.
Healing relationships and promoting healthy conflict in a family business is perhaps one of the most important pieces in pre-succession work. Without this step, many of the others mentioned above cannot happen authentically and effectively. With the complex relationships and emotions at play, tension can be at an all time high in conversations about the future.
By doing the deep work to heal relationships, we create the trust for open and honest communication.. When conflicts are resolved in a healthy and constructive manner, we strengthen the overall unity and cohesion of the family.
An article on overcoming dysfunction in the family business.
To wrap it up, it is never too early to do the work of preserving the continuity of your business for future generations, and inevitable transitions. Your family, your employees, your customers, and your legacy are worth it.
If you are looking for help getting started, we are here to help. Reach out to us below.