Last year, in my article “The Importance of Planning for a Thriving Family Business,” I touched upon business succession planning beyond the second generation, the role of communication in succession planning, asking for input, designing an objective Family Referee to step in as needed, and more.
As such, a big question from several readers spun out of that topic—the answer to which will help provide some solid next steps to transform succession planning into true succession implementation:
“You spoke about a time to have a series of one-on-one discussions with various family members in order to get their take on a general outline of events about the business succession planning. What do you cover in these one-on-one discussions, and what needs to be clear before calling the big, joint meeting(s) for the family?”
Before we get into specific answers, it’s crucial to remember two goals above all:
Whether the discussion is being brought back to succession planning after a few false starts, or the discussion just started for the first time, I’m going to focus on a Generation 1 to Generation 2 transition for the purpose of simplification. (It gets much more complicated as the number of individuals and families involved increases.)
Our Generation 1 owner:
Here are some of the questions we want to ask our Generation 1 owner prior to the expanded conversation with family about succession planning:
Our Generation 2 family members (4):
Just as with the first generation of ownership, Generation 2 family members deserve their own set of questions prior to the large family conversation on succession planning, such as:
As the saying goes, “If you have seen ONE family business, then you have seen ONE family business.”
After taking the time to gather input on how to address the issues raised one-on-one, it is then time to start the group discussion so that all can hear about the plan.
The key word here is “start.”
We have probably all seen instances where the owner says: “This is the way it is going to be.” The better approach maintaining some sort of family unity is to begin a discussion with the desire of bringing the issue to a conclusion within a stated period of time. This may also be the launch for an ongoing discussion with a family assembly or family council to discuss progress and where things might be necessary to change. Examples of questions in this group setting may pertain to the areas of:
Remember this: Every family and family business is unique. As the saying goes, “If you have seen ONE family business, then you have seen ONE family business.”
Yet, when you commit to one-on-one conversations among the different generations of family members to address their specific goals and plans, you can then move into the larger, ongoing group discussions that bring everyone together in alignment, both physically and in terms of thinking about succession.
As a result, before long, you will find yourself moving from business succession planning to succession implementation.
[Editor’s Note: To learn more about this and related topics, you may want to attend the following webinars: The Role of the Board in a Private Company and Roadmap to Selling a Business or Taking on Outside Investors.]
David Spitulnik is a successful executive with over 35 years experience in both large technology companies and in consulting to and leadership of mid-market, closely held and family owned businesses across a variety of industries. David is an Executive Coach and works with individuals and organizations to develop and implement strategies that drive transformation, growth,…
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