Succession is all about capital value, the capital value of your business in 10, 20, 50 years. Your age, your capability or pending retirement are not the focus nor core of succession. But for many, any discussion of succession is something to be avoided until it can’t be.
How do you and your family think about succession, what does it mean to everyone?
Succession in family businesses has a bad reputation as it is seen by many as code for such things as ‘you’re too old’, ‘time to retire’, ‘you are no longer capable’ and many messages in a similar vein.
But there is a better, healthier and more productive way to view and approach succession. And that is to see all succession discussions as not being about a person/s but about the business. About the continuity of the business and the ability of the business to earn an enduring income. Succession falls under the realm of strategy and is not restricted to leadership or ownership.
Strategy commences before your business opens its doors and so should succession as part of those considerations.
The real question for succession is what are we creating and building in the business that will allow it to continue for generations to come? What are the capital value drivers that we are building and compounding on? What will enable the business to continue to grow and prosper well beyond the existing leadership team?
Capital value lies in certainty and the certainty that the business can earn an enduring income. The transition of leadership is only one aspect of that certainty and l find where the strategy of the business has focused on capital value, and its drivers, transition of leadership, is never an issue because the business is always looking 50+ years ahead.
Define what succession means in your business and for your family, and you will find it becoming a real competitive trait rather than a topic to be avoided.