Ken Ingram – (A fictional story of true events and its impact). One day Papa Business & his wife Mama Business started off with a creative idea, a passion, and very little cash. Then, with their dream and what appeared to be a solid idea, they were off and on the road to success. With Mama Business as the self-proclaimed CFO, the business grew, then as the business flourished, they decided to raise a family. They saw the four children as successors, however they never gave a moment’s thought to the process of family business succession.
The company progressed at lightning speed, and they lived almost happily ever after, until Papa & Mama Business decided it was time to consider retirement, much to the Business siblings’ shock and horror:
- “You can’t retire. I want to go outside and play.”
- “You can’t retire. I don’t know what to do without you telling me.”
- “Who will be in charge?”
- “I can’t do this full time; I am not really interested in the company.”
The reactions were surprising to Mama and Papa Business because they had been sure that the kids would take over what they had worked so hard to build. They were devastated, so now what?
Often overlooked in a family business is the failure to treat the family like employees. As a result, entitlement thinking creeps in. They believe they own the business, so should not have to work at it like an employee. With transition comes huge responsibility, since every company has a direct impact on the livelihood of its employees and suppliers. When a transfer in leadership is forthcoming, it is important to determine and establish the best options.
Family Business Succession
Consider what needs to change well before the transition, so you reduce frustration, increase productive behaviour, achieve results, and build trust. You need to take action, so you need to:
- Evaluate the business by doing assessments to ensure you have the right people in the right job.
- Ensure the working environment is conductive to performance.
- Ensure each person has the right skills to do the job and if not invest in a training program.
- Consider the roles and what is best for the business and the client because it should not be based on family member entitlement.
- Consider how motivated is your team and ensure they have a clear expectation of performance.
Transitioning a business requires a thoughtful succession plan to ensure the legacy you envision continues. For help with succession planning, contact TAC. Follow TAC on any of these platforms:
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