What’s your succession plan?
I’m loving that ‘Succession’ is back on our screens. This wealthy but vastly dysfunctional Roy family (I’m guessing) is based on the real life Murdoch clan and their media empire. What the Roys lack in love for each other is made better by the wealth and power they enjoy. Each to their own. I can’t deny it makes great viewing.
Outside of the Roys, there are many other owners of family businesses who will have/have had the dilemma of who to pass the business to when they retire.
Some businesses stay in the family for many generations. The company simply adapts to changing times, technologies and customer bases as the decades pass. Others find this much harder—a situation that isn’t helped if the family members are all arguing with each other about the direction theybelieve the business should take.
Another programme I enjoy, which is often shown on one of the repeat channels, is Country House Rescue. The majority of the people they feature are families in exactly the same predicament. A grand house that has been in their families for years risks being sold, unless they find enough income to pay for its upkeep. For many, the fortune that their ancestors once enjoyed to build/buy the grand house in the first place has long since disappeared, and they’re forced with finding new ways to generate income.
Predictably, the younger generations suggest holding events in these grand houses and make plans for extensive car parks and the renovation of outhouses or spare rooms into accommodation. And, just as predictably, their parents/grandparents baulk at the idea of people in ‘their house’ and they interfere with the renovation plans because they’re so resistant to the changes.
This can happen in businesses when handed down to the next generation. The founder or last caretaker finds it too difficult to give up the reins completely and contests every adaptation, creating numerous stalemate scenarios, which ultimately have a detrimental effect on the company and confuses its clientele past and present.
I get that it must be hard to see someone making changes you don’t agree with in the company you’ve started. But change is inevitable in everything. No one lives forever, and if you truly want your business to outlive you, and for it to continue to grow, you have to detach yourself from it. It’s one of the most well-known rules in business, that you should base your decisions on logic rather than emotion, and it’s no different when it comes to your succession plans. Even if some of the next owner’s decisions make your toes curl, you have to remember that it’s their business now, and they may have a much better knowledge of modern customer behaviour than you.
What if you have more than one child and all of them are willing to take the reins when you retire—what do you do then?
It may feel to them that you’re favouring one child over another if they’re not all equally responsible for the business’s ongoing success; however, just as above, if it’s a decision based on logic and what’s best for the company, it’s difficult to argue. In this scenario, it may be better to involve people outside of the family in the decision, and to look at each child’s skills and experience rather than their pecking order in the family unit.
If it’s still too difficult to choose, legal papers can be drawn up that give all your offspring equal responsibility and control. In time, a natural order may occur; one or more of your children may not like being one of the head honchos after all, or it may become plain that someone pulls their weight much more than their siblings. At that point, a review of the business’s leadership can be carried out to one that’s more appropriate, and which will secure the future of the enterprise.
Whatever the family situation, it’s inevitable that there will be a period of uncertainty and adjustment between one generation running the business well and the next generation taking the mantle and driving the same growth. There could be fallouts, arguments and damage to the company in the short-term, but eventually any new changes will become yesterday’s news and all parties involved will become used to their smaller or bigger roles in the business’s day to day routine.
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