Succession: How to reduce the drama in leadership transitions.
February 26, 2019
No business is conflict-free, and family-owned businesses may be one of the best examples of that. Is it possible to plan for transitions in a family business without explosive dynamics, reducing the stress all around while keeping family relationships intact?
Many of us read about the public vying for control in 2014 of Market Basket, a New England grocery chain. The company lost $583 million in sales and was targeted by employee and customer protests while two cousins, both grandsons of the founder — one a board member, the other chief executive — publicly vied for control of the business. And just watch television shows Bloodline or Succession — family-owned businesses make for great drama!
You can reduce that drama by effecting successful leadership transitions, including articulation and alignment of core family and business values and determination of the future business strategy. For those fortunate enough to have next-generation family members with the requisite talent who are interested in assuming leadership of the business and willing to put in the effort, leadership development is one of the key steps.
A leadership development plan for a family business is essential. It acknowledges each family team member’s current set of core competencies and aptitudes and those that will be required in the years ahead. It creates a path to acquire the skills necessary for executive positions through training, development and independent assessment — and removes favoritism and biases from the transition equation.
Of course, the plan must be continually reviewed or modified to reflect changing circumstances in the family or the business, such as through death, divorce or divestiture of a major operating division.
For those fortunate enough to have next-generation family members with the requisite talent who are interested in assuming leadership of the business and willing to put in the effort, leadership development is one of the key steps.
Next up: how Next-Gens can achieve leadership competencies.
Based on the article ‘Succession: A No Drama Approach” originally published in Family Business Magazine.