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Successful Family Business Succession
What is the key to successful succession in a family business?
Family businesses are major creators of jobs and wealth and, above all, of added value to society, by providing the services it needs.
KEY ASPECTS OF SUCCESSION
One of the key aspects I have seen in my experience is the need for proper planning. If succession is not carried out with careful planning and an understanding of how to manage people, it can become a nightmare for the owner.
Bringing family members into operations without defining their roles and responsibilities is very likely to clash with the system that is already in place.
When family members’ duties and responsibilities within the company are not clearly defined, competent staff start to pull back, because there is someone who is not their boss but still has the power to reprimand them, override their instructions, or even create problems.
CONSEQUENCES OF UNPLANNED SUCCESSION
The main issues caused by succession without a plan are:
High employee turnover
The loss of valuable staff
Low morale among employees who no longer see a reason to stay with the company
HOW TO START SUCCESSION PLANNING
The first step toward successful succession is to set rules and operating standards that apply equally to family and non-family members; in other words, to create a level playing field for every employee, whether they are family or not.
Another advantage of succession planning is that it also benefits the family member. Sometimes, as business owners, we go to the other extreme and demand more from a son or nephew than from the rest of the team, which is unfair to them as well.
AURUM’S RECOMMENDATION
For successful succession, it is important to make room for people who are not family but who go the extra mile and are committed to your company. They also deserve the opportunity to grow, whether or not they share your last name.