Letting go of a business to which you have given so much of your life and your identity is unquestionably tough. However, being able to let go at the right time for you while also leaving the company in healthy shape, is the real testament to a business owner's strength of leadership writes Charisse Gray.
Ideally, to make the wrench less painful personally and to leave a robust business behind, you need to have a succession plan from the start. This means, from day one, choosing your staff wisely, then having the confidence to delegate and engage them in all aspects of the business, nurturing them along the way and rewarding them for their performance and their behaviours.
Owners often grapple with the tasks of choosing and grooming a successor. To do this confidently you need to have well-considered recruitment strategies in place. This is critical because a poor succession choice can undo in months what you have painstakingly built over many years.
These strategies should form part of a plan to have the right executives in the wings, groomed and prepared to take control and lead the business strongly into the future. This is also a sound risk-management strategy for a situation when there is an unexpected emergency.
Planning must be more than just a paper process. When you develop your plan, the things you need to consider include:
• developing a timeline that indicates the transition phase, and the associated activities—when ownership and management will be transferred to others, and the time needed to assimilate, mentor or train the new person;
• current and future business requirements;
• the required job roles and responsibilities, competencies and leadership behaviours;
• how and what is needed to help the newcomer gain confidence and the respect and trust of staff;
• how you can ensure continuity during the transition phase;
• what authority your successor will have and if you want to retain any authority yourself?
Family Succession
Don’t automatically assume that a family member will inherit your passion for the business, or that they would be the best person to lead the company into the future, or that they would necessarily want to!
A family member must appreciate that any role in the family business is an opportunity, not a birthright. Consider objectively whether family succession is the right option for your business. Is there someone else in the business, or externally, better placed to take your business forward? Would family values conflict with commercial decisions? Do they possess the right skills, attributes, and commitment to the business? Do they appreciate the business, where it’s been, how it got where it is, and where it’s going?
You also have to assess their experience, whether they have experience in all aspects of the business, and have been included in daily decision-making. Have they been given opportunities to make important decisions and learn from the consequences?
And do they have the trust of all family members, or would their choices cause conflict in the business?
Finally, you need to decide if family succession will provide sufficiently for your future.
When considering a non-family member, don’t presume that a valued and loyal company executive will necessarily want to head up the business when you leave. Ask yourself if they have a commitment to the same values on which your company was built.
Do they have diverse skills and experience that will assist the business to grow, as well as wide experience in all aspects of the business?
Would this choice cause conflict in the business—will they be able to work well with all your stakeholders, and with you during the transition period?
Charisse Gray is senior business writer for NSW Business Chamber.
