Over 50% of succession plans fall apart and fail…
This has been documented time and time again. So WHY do succession plans fail and what can you do about it?
In my work with family business clients I have found two things to be true for most failed succession plans.
1. Lack of Vision and Values Alignment
Many organizations have not taken the crucial step of not only mapping out the vision and values of the organization, but then doing the same for the family and the individual members of the family.
Most often this leads to family members or other individuals working in the organizations who have a vision of where they want their life to go or what they want to do and that vision is not aligned with that of the company. They end up feeling unfulfilled, sometimes even resentful, with personal strengths that are not being utilized.
Action: All values of the organization as a whole and each member of the family and leadership need to be identified and ranked to show any discrepancies or lack of alignment.
2. Avoidance and Fear of the Unknown
Avoiding potential conflict is another reason many families continuously put succession on the back burner. A looming succession creates a lot of questions, uncertainty and often fear.
I’ve witnessed families who have avoided having the conversations necessary to plan a smooth succession because of difficult relationships and dynamics within the family. There may also be questions around who is capable of running the business, and fear of passing the reins to someone who isn’t ready, creating even more tension.
Employees and leaders within the organization are often fearful that new leadership will corrupt who they are at the core, and decisions will be made in new and different ways. Younger generations coming into leadership have a different way of looking at the world, how they look at life, and how they want to run the business. All of which does not have to be detrimental if done cohesively, with clarity for everyone involved.
Action: A third party in this case is crucial. You cannot read the label from the inside of the bottle. Bring in someone who will:
- Work with each member of the family holistically to identify their vision and values
- Help ownership get clear on the vision of the business
- Interview key players in the business
- Understand the market
- Identify any dynamics, blind spots and mindset shifts needed
Succession, if prepared for with intention, could be the best thing to ever happen to your family and your business.