In many, if not most, family owned businesses, there seems to be at least one member of the next generation who wants to take a crack at being Number One. What happens when there are multiple successors and the eldest is not the best qualified?
The wrong choice can, and probably will, have devastating consequences on future family harmony and business success. Picking a successor simply because (s)he is the eldest or rejecting someone based on gender can be fatal. Unfortunately, we still see far too many businesses being lead by incompetent sons when highly competent daughters were stereotyped into inferior roles.
Regardless of whom you choose, Successor Development will impact business performance and value. To develop the people who will be responsible for business performance, management synergy and teamwork, and leadership continuity you will need first to make an objective assessment of your current family and non-family management staff. Here are a few tips for you in making a selection.
Use a formal, integrated assessment tool that identifies business and family culture fitness, leadership style, communications style, and interpersonal skill sets. This helps you identify how well various family and non-family members will work with you and others in transitioning the business to and through future generations.
Provide mentoring and coaching for owner and management successors. Pick people who have experience in working with family owned businesses and have a track record of success in the real world. Remember that lots of things that work in theory don’t work in practice.
Give potential successors opportunities to experience failure and success. Don’t let them bet the farm, but be willing to risk a few acres now and then. Your mistakes didn’t ruin the business; and if you allow them to make the right mistakes, theirs won’t ruin it either.
As you consider the family alternatives, remember that family members can still own the business without running it. In some cases, that may be the best alternative, as a client decided when she chose to develop successors outside the family because none of her children had the commitment, capability, or competence to lead the company through the next generation.
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