Letting Go – Grooming Successors

Letting Go – Grooming Successors

It goes without saying that the long-term success of any business is contingent on having competent management. Family business owners also recognize this key element of long-term survival. Many of them pay particular attention to ensuring that the next generation family managers, leaders and owners have the skill sets required to run the family business. It is more and more common for family business owners to strongly encourage (some insist while others even make it a mandatory requirement) that the next generation obtain a few years of outside work experience before joining the family business. The view is that outside work experience exposes the next generation to a different corporate culture with different policies and procedures and different management structures and experiences. Successors with outside work experience bring to the family business a sense of accomplishment and a certain degree of confidence that they have earned their stripes and are not simply being parachuted into the management of the family business due to blood lines (entitlement).

Although outside work experience for successors is considered a good thing, in the majority of cases, the next generation enters the family business with none or very little outside work experience. Given this reality, it is even more important that family business owners ensure that the next generation successors are properly groomed for their eventual roles as managers, leaders and owners. The best way to achieve this is to develop a formal grooming plan for each of the successors.

For example, in some cases, the founder of the family business will insist on developing a comprehensive grooming plan for the potential successors. These grooming plans should expose the next generation successors to all aspects of the family business with a focus on continued learning both within the business and outside the business.

The grooming plan should be applied to all potential next generation successors. There may be some differences depending on whether or not the founder is still very active in the family business. This means that the majority of one grooming plan may be completed by the founder while a few years later the same process for another potential successor would require a team of mentors including select senior managers from within the business, an outside family business practitioner to bring an outside perspective to the grooming process/plan as well as any new current leaders, as the founder may no longer be active in the business. Whether the grooming plan is lead by one mentor or a group of mentors, the importance lies in ensuring all aspects of the business are covered and that all successors follow an in-depth grooming plan.

As a family business advisor it is comforting to witness the awareness and willingness of next generation successors to embark on formal grooming plans to ensure they have the requisite skills to effectively manage and lead the family business. This will help the founder obtain comfort in the new management and ownership as well as help ensure the long-term success of the family business.

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