The topic of succession planning may not be one you want to pull out of Pandora’s box just yet. I understand. However, the fallout of not addressing this topic early enough can be quite devastating. Since we don’t know what the next year – much less the next three years – will hold, it’s important to be prepared. Therefore, I think it’s safe to say that any business owner who cannot foretell the future needs a succession plan.
This may seem extreme, but I’ve seen and heard of too many heartbreaking stories that begin with a rushed succession plan or no plan at all. When succession involves family, you want to be especially sensitive to the timeline. With family, you want to create a win for all 3 stakeholders: the incumbent, the successor, and the business.
Other people’s succession planning appears wise. Our own can appear scary.
We can probably all agree that planning for succession is a wise move. Personally, I had even coached business owners through succession planning for years, prior to considering my own. No matter how often we stand on the outside, admiring the forethought of other leaders as they plan for succession, once it turns personal it becomes uncomfortable. Why is that?
Fears that come with succession planning
- You feel confident in your role as the organization’s owner and leader. Now, you start talking about a future where you’re no longer in that role. As the head of an organization, your life is fulfilling, exhilarating, and challenging. What will life look like without that?
- Who could possibly take over the stewardship and leadership of the organization that will feel as deeply as you do? Who will be as committed to the organization, and the families represented in the organization, as well as you are?
- You will have to take your hands off the controls, and allow someone else to make decisions you may not always agree with. This person will change things you’ve spent years building. This person could be a family member, or someone who feels like a family member. You don’t want that relationship damaged so it may take a lot of effort to keep the business, the succession and the relationship all healthy.
How to deal with your fears
One of the best ways to manage your fears is to partner with outside advisors. Find an expert who has experience with succession and who can walk you through the process. He or she will know what questions to ask at various stages, so that you can process a lot of what is ahead.
Outside advisors can make the difference between a positive succession experience, like I have had, versus a miserable one such as many have experienced. Advisors give you the opportunity to openly talk about the challenging aspects of your succession plan. They also bring up a lot of questions that you would not have considered otherwise.
In a family-owned business, many parents want an adult child to be their successor, and to continue the business relationships that the parents have worked hard to build. This expectation can be a big challenge, since the adult children may have other plans for their own future. Although the younger generation may understand their parents’ dream, it’s simply not what they want for themselves. An advisor will help address this misalignment, and add an outside (non-emotional and sometimes emotional) voice to the discussion that can lead to an amiable solution for both generations.
What happens if you don’t deal with your fears
If you choose to put off your succession plans, and therefore avoid the fears that can come with it, greater challenges could come your way. And, especially if you’re the head of a family business, this procrastination can be even more destructive.
If you are not actively working on your succession plan, and an unexpected event temporarily or permanently removes you from your leadership, these could be the consequences:
- The leadership team flounders because no one knows what’s expected, now that you are not able to lead. There is a lot of confusion and conflict as the new leadership is quickly figured out. The lack of clear leadership causes disunity in the executive team and throughout the business.
- Someone is thrust into your vacated role without proper training, and they are not equipped to lead your team. The business suffers, and the new leader – who may be otherwise extremely talented – feels like a failure.
- In the case of a family business, an adult child may assume the leadership role, despite their lack of interest in the position. Their lack of passion and training is clearly seen, and it is obvious to all that they should not be in this role.
Frustration and anger can emerge when succession is not handled properly. These emotions are normal in any business if the hand-off of leadership doesn’t go well, but when you’re dealing with a family business, these emotions intensify. Families can be broken over poor succession planning. That is why I cannot over-stress the importance of using a competent advisor to delicately take you through all that needs to be said prior to the hand-off.
Fears with succession planning vs. disaster without it
I admit to having had many concerns as I started thinking about succession. And I won’t lie and tell you that the process was an easy one, but it has been a positive and healthy experience. I know the heartache that can come from poorly handled succession plans. I can say with confidence that it’s worth it to overcome your concerns and fears, and to start making those plans now.
You don’t know what the future holds, and you want to ensure that your organization is in great hands when it can no longer be in your hands. Start the succession discussion today, while you are still healthy and not rushed by outside forces. Your goal is to purposely set everyone up for success – the incumbent, the successor, and the business.