Succession is the key communication test for a family business. In fact, a change in ranks within the C-suite office can often make or break business and personal relationships. Yet succession planning can also be a great opportunity to maximize business ventures and create a multi-generational institution that embodies that founder’s mission and values.
In a survey by the Family Business Institute, only about 30% of family and businesses survive into the second generation. The statistics reveal a real disconnect between the optimistic belief of today’s family business owners and the reality that only a few survive to the next generation.
As a second-generation employee at Swerdlin & Company, and recently appointed president and chief operating officer, my parents realized the importance of implementing a business succession plan years ago. Using our experience, the following are five tips to help any company build the next generation of leaders.
Establish Goals and Objectives
Pre-planning is a critical step in implementing a succession plan. Develop the current and future vision, goals and objectives of the business. Determine the importance of family involvement in leadership and ownership of the company as well as the goals of individual family members.
Communicate Decision Making
Involve all family members in each step of the decision making process. Because sometimes transitions don’t occur as seamlessly as planned, establish a method for dispute resolution. It is also important to document the succession plan and to keep these on file for the future.
Prepare the Business for Change
Between initial discussions and final decisions, much can happen that will affect your company. Make sure the nonfamily management team is engaged in the planning and be given an incentive to stay loyal to the company and family throughout the transition.
Plan Responsibilities of C-Suite Employees
It is always necessary to plan whether the responsibilities of the current CEO will continue or how they will shift during and after the transition. When leadership roles change, it is important that the current CEO stick with the initial goals of the company and support the transition.
Train and Coach During Transition
As a part of a transition plan, leadership development programs and coaching always help the second generation learn techniques needed in their new role. Training, job shadowing or lunch and learns are an easy way for employees to gain first-hand knowledge on their upcoming responsibilities within the business.
Whether you are a large corporate entity or small to mid-sized business, it is essential to integrate these simple steps into your succession plan.
Swerdlin is president and COO of Swerdlin & Company, the seventh largest actuarial and employee benefits consulting firm in Atlanta. He joined the company in 1998 as an entry-level benefits assistant and over the years, he has become heavily involved in new business development as well as client relations. Swerdlin is a member of the Southern Employee Benefits Conference, the ESOP Association, and currently serves as President of the Atlanta Chapter of ASPPA for the 2012-2013 term. He can be reached at firstname.lastname@example.org.
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