Succession is the transferring of leadership to the next generation or hired management. It is a process rather than an event. While there is a time frame within which the transition will occur, the actual amount of time taken for the process is arbitrary. It will depend on you, your family and the type of business you are in. This is a difficult process for most family businesses. The failure to face and plan for succession has been termed the “succession conspiracy” by Ivan Landsberg. He cites a number of forces that act against succession planning in Choosing a successor in a family business:
· Fear of death.
· Reluctance to let go of power and control.
· Personal loss of identity.
· Fear of losing work activity.
· Feelings of jealousy and rivalry toward successor.
· Founder’s spouse’s reluctance to let go of role in firm.
· Norms against discussing family’s future beyond lifetime of parents.
· Norms against “favoring” siblings.
· Fear of parental death.
· Reluctance to let go of personal relationship with founder.
· Fears of differentiating among key managers.
· Reluctance to establish formal controls.
· Fear of change
· Founder’s colleagues and friends continue to work.
· Dependence of clients/customers on founder.
· Cultural values that discourage succession planning.
Overcoming the forces against succession planning requires the commitment of the family and employees of the business.
Succession occurs in four phases: initiation, selection, education and transition. A discussion of each phase will follow in 4 separate posts.