Business owners have a passion for what they do. They're builders who take satisfaction in making the company grow. They focus on the future. These traits explain success but they also can be a problem when it comes to succession.
Sometimes succession is a code name for retirement or an insignificant role on the sidelines. If that's the case, most owners will scuttle the plan. And well they should, even though the transfer of ownership and leadership is not optional.
"Every succession plan should define a role for the senior generation that incorporates the owner's personal goals."
Succession is an imperative; the question is how and when, not if. And how can succession happen if the incumbent generation is determined to be the architect of the company's future forever?
At least in part the answer lies in the following:
Plan a role for the owner after succession. Be creative and be careful. There are many tasks and responsibilities with the potential to be challenging, but the role had better not be inconsequential or dull.
Be sensitive to the right timing for transition. Too soon or too late are equally bad.
Strive to achieve the owner's primary goals such as perpetuating the business and family harmony.
Identify why the succession plan may be threatening, then fix it. For example, transfer voting control later, after the succession plan is in place.
In a caring way, be sure the owner is aware and understands the goals of the family and its individual members. Too often the owner and the next generation are surprised to learn the other's feelings. It is important to look at succession from the family's perspective too.Start with the premise that every succession plan should define a role for the senior generation that incorporates the owner's personal goals. Take advantage of the fact that the senior generation know they can't stay forever; they just don't want to be benched. Give them a path to follow that takes them where they want to go.
Many times the path will lead to financial security, to plans that assure fairness within the family and to decisions on who will be the next leader and the timing of successor management.
Owners, of course, know they are getting older and that with age comes change. When the owner is 60, for example, he or she is generally not willing to pay the physical or emotional price that was acceptable thirty years earlier.
A final consideration in developing succession plans is to evaluate whether the plan responds to family goals that have a profound influence on the owner's decisions. The challenge is to identify those goals, to communicate them constructively and to build consensus.