Family business transition and succession planning

Succession planning and integrating the next generation remain critical and challenging issues for many family businesses. Without a thoughtful and structured approach, business owners risk undermining their legacy. They also risk weakening the long-term sustainability of the enterprise. This happens when family, ownership and business systems are not prepared for the transition.

- 

Many family business leaders focus only on choosing who will lead the business. Succession planning is far broader than leadership alone. Leaders must develop strategies to transition ownership roles, governance roles and business leadership roles. These strategies ensure a seamless handover. They also help build a legacy that lasts.

Common blind spots

To enable effective succession, it is important to understand some of the key blind spots that hamper a smooth transition.

These include:

Avoiding the conversation

Many family businesses avoid the conversation because they think they have time and leave it too late. They also want to maintain harmony and avoid dealing with the aftermath when they are no longer around. Some leaders believe no one is ready to step into the role. And, in certain countries, cultural norms make discussing succession a taboo.

By avoiding this key conversation, business leaders lose a valuable opportunity to obtain input from family and business stakeholders.

No formal succession plan