Ten Tips For Succession Success
14th February 2017 Steve Rees, Director at Carpenter Rees
Keeping it in the family - Ten things to think about when it comes to the succession planning process.
When it comes to succession planning, no other type of business faces such a daunting transition period than those that are family-run. However, careful implementation of a well-considered succession plan will help facilitate the seamless transfer of leadership between the generations.
When considering how to implement a succession plan, the following should be considered:
Preparing the organisation – from the new CEO or MD down to the most junior team member, it’s important to ensure everyone involved is aware of the changes before, during and after the transition, and what it means for the company, their clients and the workforce.
Be honest – people who work in family businesses are more likely to be concerned about the challenges that face the business, particularly when it comes to the exit of a family member. The different skill sets that remain and are brought to the table will be of utmost importance and staff may question their loyalty to the departing member or the company itself. That’s because they’re more likely to have invested in the business as a result of the strong family culture that’s inherent. Being open and honest should help appease most, and allow people to make up their own minds.
Leadership skills and development programme – this should include an outline of planned career paths not just for family members, but for all those involved in the next generation of the business management.
Highlight the business’ strategy – even if there’s no change to the day-to-day running of the business, reinforcing where it’s heading will instil confidence in the remaining employees and family that the company’s successes can continue, following the departure of the current leader.
Choosing a successor – this shouldn’t be a snap decision. There needs to be a clear process outlining timescales, the criteria required and who is responsible for the final decision.
Announcing a successor – once the successor is confirmed, clear communication of the announcement needs to be handled effectively and sensitively
Senior’s exit plan and successor’s expanding role and responsibilities – there should be a clear strategy of how the current business owner will reduce their involvement while their successor takes on more responsibility, to help keep things on track and provide the entire workforce with the necessary transparency.
Transparent communication – whether there’s going to be a quick handover, or a lengthy and thorough one, there needs to be clear communication from the top down as to who is working on what. The type of handover will naturally depend on how involved the successors have been to date, but communicating the company’s strategy will appease members of the business, as well as the family.
Learn to let it go – the departing member of the family business may struggle to relinquish control, but it’s only natural for someone who has been in a role for a long time to think that there are tasks that only they can do. While emotions could run high, having these frank and honest conversations will be something the departing member will expect. As part of the process, make sure that they are delegating and handing over as they go along.
Organisational succession – a succession plan is never over, it’s an ongoing progress, throughout which there will be peaks and troughs! Once the business has successfully transitioned from one generation to the next, the new guard must consider its own plans for the future and those beyond their leadership.
Carpenter Rees recently undertook a research project with Manchester Metropolitan University’s Centre for Enterprise, titled Priorities and Concerns for Family Business. The resulting research paper includes findings from a workshop held with family business clients and advisers, bringing together intelligent planning and experience to help families achieve personal and business goals.