Who Helps The Person Stepping Down?

We spend a lot of time worrying about whether the next generation is ready to take over a family business. I sometimes wonder whether we spend enough time thinking about whether the senior generation is ready to stop running it.

If someone has spent 30 or 40 years running a business, perhaps having started it themselves, stepping down is a pretty significant change.

The business isn’t just where they work. It may be a large part of who they are. Their relationships are there. People have been asking their opinion for years and they have probably spent decades feeling personally responsible for what happens.

I have never particularly liked the expression that someone “needs to let go.” It makes something quite complicated sound remarkably simple.

Perhaps a better question is: what are they going to do instead?

We put a lot of effort into the role of the person taking over, but sometimes remarkably little into the role of the person stepping down. They stop being CEO or MD, perhaps remain on the Board and everyone carries on.

The trouble is, quite often they carry on too.

And why wouldn’t they? If we haven’t worked out what somebody is moving towards, we shouldn’t be particularly surprised when they keep returning to what they have spent most of their working life doing.

There may still be a huge amount they can contribute. If they founded the business, perhaps they become Founder or President. Perhaps they retain a handful of important relationships, represent the business externally or get involved in the things they genuinely enjoy and are good at.

The title isn’t particularly important. Finding something meaningful to move towards is.

But there is also the question of the Board.

You can appoint the next generation as CEO, but if the person who ran the business for 30 years is still sitting beside them at every Board meeting, have you really given them the space to become CEO?

Maybe. Every family is different. But I don’t think we should assume so.

Family relationships don’t suddenly change because someone’s job title has changed. If you have spent your life deferring to Mum or Dad, there is a fair chance you will continue doing it. Partly through respect, but also simply through habit.

The same applies to people elsewhere in the business. Someone who has spent 20 years looking to one person when an important decision needs making isn’t necessarily going to stop because the organisation chart has changed.

None of this means the senior generation is deliberately interfering. They may genuinely believe they have stepped back. But if people continue asking their opinion, it is quite difficult not to give it. And if you have spent decades solving problems, it is probably quite difficult to watch somebody solve one differently.

This is where I think a good independent Chair can play a really important role.

The Chair knows the family and the business but isn’t actually part of the family. They can often see what is happening rather more clearly and have conversations which may be much harder between a parent and their children.

One of the most useful questions they can ask the person who is stepping down might be a very simple one.

What are you actually going to do when you’re not running this place?

Perhaps they love dealing with customers but have had enough of managing people. Perhaps there are parts of the business they still really enjoy. Perhaps they want to spend more time away. Perhaps they would enjoy mentoring some of the younger people coming through.

Or perhaps, underneath everything else, they are worried that the business won’t be OK without them.

If you have spent most of your working life feeling responsible for a business, it must be difficult simply to decide that somebody else is responsible now.

And this is where I think the Chair can provide something beyond good governance.

If the senior generation trusts the Chair, they know there is someone experienced and independent around the Board table. Someone who understands the family as well as the business, who will support and challenge the new CEO, ask the difficult questions and say something if they think things aren’t right.

That must make stepping away a little easier.

The Chair can also help establish where the boundaries should sit. In some cases that may mean the senior generation leaving the Board altogether while continuing to have a meaningful role elsewhere in the business.

That shouldn’t be seen as pushing somebody out. It may actually be one of the most supportive things they can do for whoever is taking over.

Successful succession isn’t about getting the senior generation out of the way. Nor is it about repeatedly telling somebody who has spent their life building a business that they need to “let go”.

It is about recognising what they have done, finding a worthwhile role for them if that is what they want, while giving the person taking over enough space to make the role their own.

Perhaps that is one of the less obvious jobs of a good Chair.

Not persuading the senior generation to let go, but helping create the conditions in which they feel able to.