5 things you need to think about for succession
Devon has some of the UK’s largest and most successful businesses, whether it’s St Austell Brewery, Princess Yachts, or Celtic & Co. But running a family business isn’t always plain sailing, and one of the biggest challenges that family businesses face is succession.
Succession is the process of handing a business – or large amount of wealth – down to the next generation of leaders. Within a corporate business, this means preparing those beneath you for the day they’ll one day take over. But within a family business, succession planning sees you preparing the next generation of family members to rise to the challenge and lead the business onwards into the future.
Succession planning can focus on individual senior positions or can take a more generic approach. On top of this, succession can be carried forward informally or formally – through simple conversations, or through structured processes like performance review processes.
The process means not only thinking about the future of business operations but the future of management, too. Succession can be a daunting prospect for many business leaders who may find it hard to hand over control of day-to-day management.
Succession is often misinterpreted as a standalone – this is not so. It is a process that can take years to carry out, and it usually consists of lots of strategic and continuity planning. So, with that in mind, here are five things you need to think about for your succession event:
1. Start earlier than you think
One of the most common things people seem to get wrong in succession planning is not starting early enough. Those at the top of businesses are often, rightfully, so preoccupied with the day-to-day running of the business that they completely forget a succession event is incoming. Perhaps this is because it is not a tangible process but rather an accumulation of separate steps that occur throughout the business, across many months.
Similarly, many managers and leaders are so overwhelmed by the prospect they push the process to the bottom of their to-do list. The problem with this is that it can lead to intense pressure later on.
So, start thinking about succession as soon as possible…and this is sometimes 10 to 20 years in advance! Always better to be safe than sorry. As some family business advisors say, it’s never too early to start succession planning.
2. Prepare the junior leaders
Once you’ve considered who may be the suitable candidates to take over once you leave, make sure to prepare them in the time running up. This may mean harnessing your own or colleagues’ expertise and passing on valuable lessons you yourself have learnt in business.
You might consider having the possible successor/s working alongside a senior manager for a lengthy period of time before succession, in a mentor-style manner. Additionally, you may wish to give your successor up to a year to familiarise themselves with relevant clients, necessary business insights and entrenched company structure.
3. It might not go as expected
There are countless examples of family succession events going wrong, as it can lead to unnecessary conflict between different members of the family and generations.
Especially within a family business, be reminded that the process may not always unfold in the way you expected it to. Younger generations may not have the required experience or aptitude by the time succession comes about, even if you have been preparing them for some time.
Having this honest conversation early on to avoid disappointment is crucial to maintaining communication throughout the process, and ensuring that, when the time comes for them to finally step up to the mark, they haven’t felt like a second choice.
4. Maintaining morale
A common side-effect of the succession process is the negative impact it can have on company morale. The prospect of a well-established and trusted employer or leader leaving can sometimes cause unrest in the organisation.
Being open with employees and sharing each step of the process with them will help them feel included.
5. Who you pick
There is a tendency in the succession process for current leaders to choose incoming leaders that resemble their management style and workplace history – someone who is “just like you”, in other words.
The problem with this is that it may cause you to overlook valuable talent within your business. Be open to new styles of leadership and take time to consider candidates who may not have the required expertise, but can learn the way with your support.
