by Jacqueline Hall on 21 July 2020 3:48pm : 45
Some family business leaders willingly engage in succession planning, whilst others resist.
Though well into his dotage the founder was unwilling to hand control over to the next generation. Much to the chagrin of his offspring, already in their middle age, he was going to continue until time and his body dictated his end. Reasons why family business leaders may avoid succession conversations are varied, including:
- Fear that their personal legacy will be diminished. They worry the values on which they built and maintained the business might be discarded by the next generation. They are anxious that the business will be mismanaged by an inept successor. They imagine that the entity they built through their hard work will become unrecognisable.
- A paternalistic attitude and approach towards the business’s growth. Its hard for them to envisage anyone else giving the business the same level of attention, care, or dedication as they have done. They may feel a sense of duty to and responsibility for the employees who work in the business. Their ‘child’, they reason, needs to be looked after, and can only be protected by their continued presence.
- A narrative in which they are the hero of the story. Unwilling to believe anyone else can be as good as they are, they lack trust in the people around them. They doubt the capabilities and skills present amongst the family members who work in the business yet keep them on board. Each time someone turns to them for a decision, this ‘proves’ that they alone can keep the business alive. In their mind they are the strongman without whose muscle the business cannot survive.
- Desire to maintain leadership control. Though the landscape around them has changed, they do not want adaptation and resist new methods and approaches. Their refusal to openly discuss the 's' word, or their promise of discussion ‘when the time is right’, is a means of manipulating potential leaders. They sow discord amongst their children as a divide and conquer strategy, and ensure they alone have all relevant information. Averse to handing over the reins, they believe relinquishing authority and influence, will mean no longer being thought important.
- Lack vision beyond themselves. A sustainability plan that does not include them, and even brings in outsiders as managers is unacceptable. Agreeing to this would signal that the business is bigger than them. They are reluctant to see the business’s organisational structure change, even if potentially for the better.
- Hidden agendas. It could be that they intend to sell the business and retire on the proceeds rather than pass the business on. This they conclude is their right having built it up from the ground, and do not want interference. They might intend for their favourite child to succeed them - eventually, whether they have the right qualities or not. They aim through the successor they have chosen, to continue to dictate the business’s direction.
- Perception of succession as ‘my plan’ rather than ‘our plan’. They fail to see succession as a business wealth and longevity management strategy to be discussed and implemented in a timely manner. Refusing to fully consider all interested parties, from their perspective the matter concerns only them.
Succession discussions and decisions force leaders to think about the end of their reign and their own mortality. Having founded their business and gotten used to being the authority and exerting power, it can be hard to release to another. Though no one can realistically go on forever, in their heart some leaders find this hard to accept. Without a shared succession vision and implementation plan the business may be set to wither rather than thrive and enjoy longevity.
Call 0203 2901253 for your 30min complimentary appointment