'Preparing The Next Generation Is An Important Aspect Of Succession Planning'

Douglas Shackelford, dean of University of North Carolina’s Kenan-Flagler Business School, says future leaders must be adept at balancing tradition with innovation

- Neeraj Gangal

Succession planning takes time; firms plan it for multiple years after taking into account the vision for the company’s future, says Douglas Shackelford, 60, dean of University of North Carolina’s Kenan-Flagler Business School. In an interview to Forbes India, the award-winning researcher and professor of taxes and business strategy speaks about the importance of clear communication in family-owned businesses and respecting their socio emotional goals. Edited excerpts:

Q What are the distinct advantages that family-owned companies have over others?

The advantages can include long-term orientation, strong family culture, agile decision-making, efficient leadership, strong customer and supplier relationships, and a deep commitment to the firm’s mission. Family businesses that have a clear, shared vision of the future can take complete benefit from these advantages and outperform their management-controlled counterparts.

Q Family-owned companies are invariably in the news for reasons such as filial disputes, generational differences or corporate governance tiffs between founders, boards and management. What lies at the core of these problems?

Many conflicts that family firms face arise from a lack of open, transparent communication. Differences in perspective can create misunderstandings and conflict. Frequent, honest communication can help build trust.

Q What is the ideal way of settling a dispute among stakeholders of a family-led business?