🔒Tips for creating a family business succession-planning strategy

In any company, long-term success requires strategic, forward-looking decisions from executives.

However, in a family owned business, planning for the future can be particularly complex. By proactively creating a plan for future generations of leadership, family business owners can help ensure their organization endures for years to come.

Below are four ways family business owners can create a succession-planning strategy that aligns with organizational values, and positions the company for continued growth.

Identify leaders

Early in the planning process, leadership should focus on identifying candidates who are well-suited to lead the organization in the future.

However, while skills and experience are important factors in any staffing decision, family business owners should also consider whether these candidates have a passion for the organization and a desire to be involved for years to come.

By having open and honest conversations with family members and potential candidates early in the process, key decision-makers can better determine who may be the best fit to lead the company in the future to help avoid unnecessary training down the line.

Underscore values

Family owned businesses are often built upon a strong set of guiding principles that are fundamental to the organization, its staff and its operations.

However, while these values may ring true to current leaders, it is important to ensure future generations share the company’s vision and are committed to protect and promote it moving forward.

A well-defined set of organizational values can be a guiding light for leaders as they navigate times of crisis and other important decisions.

By aligning succession planning with fundamental principles, family business owners may feel more confident in the future of the company and its shared values.

Bring in help

It is natural for work and personal lives to overlap when managing a family owned business, particularly when planning for the company’s future. While inevitable, these situations can create tension and strife both in and out of the office.

When worlds collide, it may be helpful for business leaders to bring in outside help. Whether the family chooses to enlist a third-party lawyer, financial advisor or HR consultant, external voices can provide an unbiased, expert viewpoint on complex situations and avoid hurt feelings.

This approach can help family members see issues from a new perspective and may lead to solutions that better position the company for future success.

Formalize the plan

After agreeing on an approach, management should formalize a plan of action that can be shared with internal teams and family members.

Whether executives choose to create a handbook or roadmap, the document should provide a comprehensive view of plans for the company’s future as well as any contingency plans that have been developed in case of emergency. This approach helps to ensure both current and future leaders are aligned on the direction of the company.

After finalizing the plan, management should consider sharing it with all family members who have a stake in the business to avoid questions or conflict.

Succession planning may seem like an intimidating process, particularly in a family owned business. However, leadership can address the issue head-on by proactively investing time and resources to identify potential leaders, underscore core values and develop a strategy for the future.

Eric Cormier is manager of HR services with Insperity, which provides outsourced HR.

Return to HBJ’s 2019 Family Business Awards landing page