The Benefits Of A Well Designed Family Business Succession Process
Succession is not just about exiting a business, there are many benefits that can be gained from a well-designed and delivered succession process.
Keep in mind that the core goal of family business succession, what I referred to as Transition, is ‘enabling the compounding of wealth from generation to generation while ensuring family unity, individual growth and a sense of contribution.’
The first land that you enter in a Transition process is the Land Of Goals where you seek to identify and lock in those outcomes (goals) that you are seeking to achieve from your Transition process. I find that these initial goals are refined as the transition journey progresses and they are vital to providing direction and focus in your journey. There are four basic question that you seek to answer in this initial Land Of Goals:
- Why am I considering succession?
- What am I expecting to have achieved at the end of the succession process?
- Where do I want to be in, say, five-year’s time?
- What legacy do I want to leave?
The answers to these questions allow you to craft your initial set of goals and set the direction. And typically raise a course of actions that are focused on a breadth of matters, for example:
- Growing, maximizing and future proofing the capital value of your business.
- Maintaining an active involvement in the business at a level and duration that you prefer.
- Identifying, growing and building the new leadership team to take some of the load off you.
- Planning so there is enough capital and cash flow for the existing and new generations of leaders/owners and the growing business.
- Provide for the continuing needs of your family and all the families that rely upon the profitable strength of the business.
- Ensure that family wealth is not diminished as it transitions to the next generation by providing the best platform for it to be built and compounded on.
- Supporting and underpinning unity, fairness and opportunity within your family.
Transition is of strategic importance and a vital strategic capability in any family business, bearing in mind that family businesses are the backbone of economies around the world and include many of the largest and most successful business that support our communities.
This short videos discusses the outcomes you should expect from your transition (succession) process:
