Fractured Relationships And Family Business Succession
The Twelve Dangers In Family Business Succession — 3. Glacier — Icy Relationships
Family members are not communicating with each other and are not participating in the succession journey.
Whether you intend to transition the business over to the next generation or simply sell it outright to a third party, if you have family you will need to engage and connect with them if you want your wealth to compound across the future generations.
Siblings at times grow apart and do not have good relationships with each other, and this can be made worse when spouses and partners are introduced to the mix. For an effective succession process to be conducted ‘good to excellent’ communications need to exist, and it will be your principal role to support this outcome. Often the independent succession advisor can be catalyst for improved communications and relationships within the family.
The whole succession process can in fact become the journey and the glue that re-establishes relationships and continuing connections.
Families can build wealth in one generation and destroy it in the next. Your individual approach to succession and your succession plan will probably be the most influential factor in determining whether the wealth you have built over your lifetime is retained and grown by your children and grandchildren or lost.
Perhaps the most dangerous assumption I have seen is the successful business person who assumes all will be well with the next generation and does nothing to guide their path. Family unity, individual growth and a sense of contribution are the critical elements that determine whether one generation will sustain and grow the wealth built in the previous generation.
These elements represent the core questions you must ask yourself when considering your succession plans from a family perspective:
- Is what I am intending to do going to build family unity or cause division?
- Am I allowing opportunities for each individual family member to grow and develop?
- Will individual family members feel a sense of pride and contribution, or will they believe they have been excluded and ignored?
- Is the next generation of leaders present amongst the family members?
- Am I building a governance structure upon which wealth can be compounded across generations?
Your actions in response to these five core questions will be key in building the strength of your succession process.
Families are complex and allowing everyone to have a fair opportunity to contribute and grow is often not easy. However, in making decisions an eye must always be kept to their future impact on family unity and the ability of the family to compound wealth across generations.
Fractures in relationships are often reflected in painful memories that no one really wants to address, but which everyone still remembers. In succession you must address these fractures, consider how they may be remedied, if at all, and consider their possible impact on the succession process.
Family can be difficult and balancing the needs of individual family members, including spouses, with business imperatives can be almost impossible at times. However, it cannot be ignored, as this is the area where trouble can brew and then explode at the most unexpected time.
Here is a brief video clip that speaks into this theme with links to the full video and resources:
