She has your common sense and drive for achieving results, and her mother’s sound judgment about people. But is she the right candidate to lead your business to future prosperity? He has worked with you for years, sticking with you through tough times and contributing to your successes. But does he have the right experience to take over the reins?
It isn’t easy choosing the son or daughter who will be the next leader of your family business. Many business owners struggle with the decision, even avoid it, when preparing their succession plans. After all, a decision like this requires you to set aside the emotions you have about the people who are closest to you. At the same time, you have to be able to envision, identify and articulate what the new leader must do to ensure your business remains profitable. This can be a difficult process because the leadership abilities that will be required in the future may be very different from those that served you well in the past.
Difficult as it may be, the decision you make will determine whether your organization survives and how well it will perform under the next generation. The right leader will continue to grow your business and ensure a revenue stream that yields the value you expect. The wrong leader can damage client relationships, take inappropriate risks and disengage key staff. The following are some steps that will help you assess the needs of your business going forward and determine which of your offspring is ready and best suited to succeed you:
- Describe what the job is today — Over the next few months, keep a record of the significant things you do, the decisions you make, the information you use in making those decisions and the stakeholders vital to running your business. Use this information to identify the education, skills and contacts your next leader must have to fill your role effectively.
- Envision the future of your business — Think about where you see or want your business to go. Compare your future vision to your past performance. Ask yourself what education, skills and competencies made your success possible and whether they still have value or must change to achieve your vision. Ask some of your key managers and trusted advisors for their perspectives; it will give you the objectivity you need to plan your company’s future.
- Set aside your emotional attachments — Assess the skills and abilities of your son or daughter just as you would any leadership candidate. Do they have what it takes to ensure the continued health of your company? It is sometimes helpful to engage an objective advisor to assist with this assessment. Often, your spouse or life partner may also be able to provide impartial advice that will help you make your choice.
- Identify and address skills gaps — You may find that your son or daughter has skills gaps that must be resolved before he or she can step into your shoes. Once you’ve identified the gaps, develop a plan for how you will address them — through training, formal coaching or on-the-job experience. If you cannot address every gap, consider handing over some leadership responsibilities or duties to another professional in your organization. For example, you might transition your marketing activities to the lead sales person so that your successor can focus on his or her operations and financial management strengths. If you are unable to address the majority of these skills gaps, you will have to look for another leadership candidate.
One approach to consider in making your decision is a ‘trial run’ of your new leader. It’s more than an opportunity to validate your choice. It gives your son or daughter a chance to get comfortable with the responsibilities and requirements of the role. Moreover, it helps build confidence among your workforce, suppliers and clients that the leader you’ve picked has the necessary capabilities to expertly guide your organization to new levels of success. Regardless, the sooner you start to plan for the next leader, the better. By starting early, you will give yourself the necessary time to understand what is required for success in the future, assess your options and give your son or daughter an opportunity to develop the skills they will need to succeed.
Anna Stuart and Joe Moore are both Partners at Knightsbridge Robertson Surrette, Atlantic Canada’s leading integrated human capital solutions provider. Anna has provided recruitment, strategic and operational advisory services to governments, industries and family businesses throughout Atlantic Canada. Joe has been providing career guidance, financial counselling and retirement planning advice to Knightsbridge Robertson Surrette clients for over a decade.