Industry: Manufacturing
Location: Midwest United States
Company Overview: Second generation, family-owned company
Succession Matrix® Issues: Leadership & Management Continuity, Management Synergy & Teamwork, Successor Preparation, Family Governance
Challenge: The owner is ready to retire, yet no successor is fully ready to take over. Two of his three children are working in the business with the inactive son uncertain about his future involvement with the company. The two active siblings and senior managers are all trying to compete for the opening CEO position.
Actions Taken:
- Identified and selected candidates for a newly created Executive Management Board designed to create assurance that good decisions would be made by a team, rather than depending on one individual (who had been the second generation CEO).
- Used management and team building assessments to develop and communicate operating and management covenants, organizational values, and vision statement.
- Established mentors and successor development curricula for the two third generation managers.
- Developed and initiated Family Business Council to facilitate communication about both family and business issues.
- Created a qualitative CEO model allowing for a nationwide executive search and interview process.
Results:
- An interim CEO was hired allowing the second generation CEO to retire on schedule.
- Profitability and production are at historical highs.
- Inactive third generation sibling has been integrated into the Family Business Council and plans have been made to bring him into the business.
- Second generation managers realized and willingly acknowledged that their career desires put them in line for two different roles; one wants to be CEO and the other COO.
Interview with the Succession Planner
1. Were there any other issues that had to be dealt with?
A lack of clearly defined roles and responsibilities, unmet and unexpressed expectations, and poor communication at the family and executive levels were causing family stress and workplace problems.
2. How was this issue handled?
The second generation managers and all executive managers’ roles and responsibilities have been realigned to fit skill sets and experience. Compensation incentives were also created based on individual and organizational performance to promote executive level management. Thanks to these actions, family tensions have been relieved and the executive management team is working together as a team.
