Ways to Make Family Business Succession Planning Easier
Succession planning can be challenging as a family business owner, especially if you are the founder. Many founders struggle with the idea of someone else taking over the business they have built, and the younger generation often does not feel like they are ready to take over. This puts the business at risk because the founder can’t run things on their own forever. Not having a transition plan in place can be risky if the leader has medical issues or is otherwise incapacitated for a time. That’s why it’s so important to create a succession plan.
Invest in Business Assets Now
If you see your business making a major ownership transition within the next few years, it is a good idea to consider investing in other business assets now. That way, things will have a chance to settle down now so there will not be too many major changes all at once. If you are focusing on sustainability initiatives, you might consider investing in electric vehicles. Replacing fleet vehicles with electric ones is a critical step in transitioning to a greener and more cost-effective fleet.
See Things From the Younger Generation’s Perspective
Engaging with the younger generation as you plan for retirement but before you even plan for succession can create a sense of collaboration, allowing them to see the ways they can contribute to the company in the future. At the same time, seeing things from their perspective also helps them see that you support their career and personal goals. Having these types of conversations can build transparency and create trust. Seeing things from their perspective will help you see what values you share with each other.
Enable Trusting Relationships
Trust is an essential value for any team to perform well, and family businesses rely on trust as well. Several behaviors can help build trust. Being sincere means you are consistent in both your actions and words, and being reliable means you keep the promises you make to others. Ask yourself what skills your children have that will be beneficial and what they might need to work on to make you trust them to take over. Communicating these things to your child will help you know that you can depend on them.
Balance Collaboration and Control
Family businesses often experience conflict when it comes to collaboration vs. control, and the way your family dynamics play out can sometimes make these things even more problematic. Sometimes the kids of business founders do not want to take on leadership responsibilities because they do not feel like they have enough autonomy over their work to do it well. You can avoid this issue by not overriding your children’s choices in your company. Understand that alignment and autonomy do not exclude one another to avoid a breakdown in the relationship.
Effective succession planning should mention when your kids begin taking on more responsibility. Your plan should also outline who is able to make decisions in what areas. Make sure to clearly communicate the outcome you would like to see for certain business decisions. This can give new leaders the room to make autonomous decisions that will put you both closer to your objectives. This can help you create a balance between meeting your goals and giving your new leaders flexibility in figuring out how to do it on their own.
Allow Chances to Connect with Other Generations
The most successful succession often happens when families talk to the next generation about competition, history of the organization, and possible growth opportunities. Make sure to talk about ups and downs they may face as well. It’s a good idea to look for ways to figure out how your kids’ goals and priorities might line up with the business’s goals. Give your kids the chance to shadow leaders in the organization for a while. The key is to give your kids a chance to bond with other generations.