Business owners frequently select their successors with an intuitive approach, or based on experience-informed “gut” feel. Most of the time they’re pretty good at it, but when it comes to evaluating a successor for a family business, the family relationship dynamic inevitably clouds a business owners evaluation. There are emotional entanglements that get in the way of their well-grounded intuition. So to help business owners be less instinctive and more intentional and consciously competent in selecting a successor, there are some key indicators to look for in identifying a successor for your business.
Before looking into key indicators for evaluating a successor, the most important thing is AVAILABILITY. The key to ensuring you have at least one available successor-candidate is thinking and planning ahead. Many business owners don’t think about succession until it’s staring them in the face and then they look up and say, “Hmm, who’s going to be my successor?” Since you know the “succession question” is inevitable because we don’t have the power to stop aging, you can take advantage of time and begin to mentor and coach early so when the time comes, you have options.
When it comes to finding an available successor, a lot of family business owners look at their kids. However, many business owners feel that their business has been so difficult that they try to encourage their kids to go do something else. This can sometimes be the right thing, but other times it’s a real mistake and tragedy, because kids end up opting out of the business without a real knowledge of what they are choosing against.
Additionally, many owners remain their organization’s key manager and fail to develop people under them who are capable essentially becoming a genius surrounded by a thousand acolytes. If you’ve encouraged your kids to go do something else and you haven’t developed a non-family successor, well, your options are limited and probably not the best ones.
If you’re beginning to think about succession, and if you’re not you should be, first start with the process of determining the available potential successor candidates.
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