Family business succession planning is an art in itself. A smooth transition to the next generation requires planning far ahead of time to ensure you've selected the right candidates and can thoroughly vet and prepare your successors. In this installment of our eight-part series, “Pivotal moment for family enterprises,” we’ll outline the steps you need to take to help ensure you're setting up the next generation for success.
For family enterprises, the process of transitioning from one family leader to the next can be a time of trepidation and uncertainty, excitement and optimism, or perhaps a combination of these and other emotions. In most cases, the fate of the transition is determined by how well the business, board, and family have prepared.
As we’ve shared throughout this series, a well-run family enterprise is grounded by a solid governance structure, which guides the business, the family, and ownership on many important matters, including generational succession. With good governance in place, confusion may be replaced with celebration as the family looks forward to ushering in the next generation of leadership.
Current leaders play a significant role in setting the tone for the transition when a leadership change is forthcoming. Achieving that balance of allowing next-gen leaders to find their own way while honoring the values, principles, and purpose that helped establish the business to begin with requires current family and business leaders to approach the transition with open-mindedness and intentionality.
From the value of observation and involvement to a two-way street and finding the right roles—there are key questions to consider asking for supporting leadership transition.