Paving the Way for a Smooth Succession in Family Businesses
In family business environments, it is common for business owners to feel overwhelmed by the question of who will become “king” or “queen” when there are multiple capable family members working in the business; especially when not all candidates are suitable for the leadership role. Competition among family members can be either positive or negative; which is played out on popular television series such as Succession. It’s great when there are multiple highly qualified candidates to form a strong management team, but if not managed properly, competition driven by ego and entitlement can cause disruption, division, and conflict.
To mitigate these challenges, it’s essential to establish a Successor Development Program that outlines the rules and performance criteria for becoming a confirmed successor and being considered for the CEO role. The first rule should be to demonstrate humility and conform to the program. Enthusiastic participation in the program is crucial as it shows a willingness to accept responsibility as a role model and leader.
The Successor Development Program focuses on annual career development tracks to gain knowledge and experience, as well as systematic evaluations of a candidate’s performance through semiannual reviews and annual 360 assessments. This process is necessary but challenging, as it can be easy to avoid evaluating the candidates’ 5 C’s (collaboration, commitment, competency, capacity, and character). Skipping this process can have negative consequences, such as declining performance and complaints from senior management.
Choosing the Successor Leader should not be based on popularity, intelligence, or birthright. It’s crucial to establish a successor development plan, monitor and evaluate the candidates, and make the best decision based on merit. Failing to do so can result in a never-ending cycle of declining performance, complaints, and conflict, hindering your ability to retire peacefully.
Contact Us, and we can help you with insights and other resources and see if it makes sense to work together. At the very least, in 30 minutes, you may get some ideas you can apply to your business immediately.
NextGen leaders can feel like they are stuck between and rock and a hard spot. Working to fulfill expectations of leadership as well as making their mark on the organization to earn respect. Click the following links for more drill-down resources on Successor Preparation.