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    WCG - Succession in Fam Bus 7-10-09

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    Bill Taylor
    The document discusses management succession in family businesses. It notes that succession requires timely transition from one generation to the next, but parents may be unwilling to give up control and the next generation may not be ready. The founder sets the tone for succession planning by accepting or rejecting the reality that each generation will manage differently. Ideal succession involves the founder integrating succession concerns into strategic planning and updating values to guide the business over generations. Succession can be a long process or occur through crisis without planning, and only 30% of businesses survive to the second generation due to lack of succession planning. Key actions for successful succession include selecting and developing next generation managers, providing career opportunities, and developing positive family relations across generations.

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    WCG - Succession in Fam Bus 7-10-09

    Uploaded by

    Bill Taylor
    36 views4 pages
    The document discusses management succession in family businesses. It notes that succession requires timely transition from one generation to the next, but parents may be unwilling to give up control and the next generation may not be ready. The founder sets the tone for succession planning by accepting or rejecting the reality that each generation will manage differently. Ideal succession involves the founder integrating succession concerns into strategic planning and updating values to guide the business over generations. Succession can be a long process or occur through crisis without planning, and only 30% of businesses survive to the second generation due to lack of succession planning. Key actions for successful succession include selecting and developing next generation managers, providing career opportunities, and developing positive family relations across generations.

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    Succession in the Family Business

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    The document discusses management succession in family businesses. It notes that succession requires timely transition from one generation to the next, but parents may be unwilling to give up control and the next generation may not be ready. The founder sets the tone for succession planning by accepting or rejecting the reality that each generation will manage differently. Ideal succession involves the founder integrating succession concerns into strategic planning and updating values to guide the business over generations. Succession can be a long process or occur through crisis without planning, and only 30% of businesses survive to the second generation due to lack of succession planning. Key actions for successful succession include selecting and developing next generation managers, providing career opportunities, and developing positive family relations across generations.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    36 views4 pages

    WCG - Succession in Fam Bus 7-10-09

    Uploaded by

    Bill Taylor
    The document discusses management succession in family businesses. It notes that succession requires timely transition from one generation to the next, but parents may be unwilling to give up control and the next generation may not be ready. The founder sets the tone for succession planning by accepting or rejecting the reality that each generation will manage differently. Ideal succession involves the founder integrating succession concerns into strategic planning and updating values to guide the business over generations. Succession can be a long process or occur through crisis without planning, and only 30% of businesses survive to the second generation due to lack of succession planning. Key actions for successful succession include selecting and developing next generation managers, providing career opportunities, and developing positive family relations across generations.

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    of 4

    COLUMN

    WESTON COUNTY GAZETTE


    BILL TAYLOR
    7/10/09
    SUCCESSION IN THE FAMILY BUSINESS

    Business continuity requires generation to generation transition. Timeliness

    in the transition is essential. However, the parents may be unwilling to give

    up control and authority at the time the next generation wants it or should

    have it. On the other hand, the next generation may not be ready for their

    responsibilities when they have to assume them.

    The founder, as the most influential person in the organization, sets the tone

    for management succession, makes the "rules" and, more than anyone else,

    determines success or failure of the succession. Each family business will

    eventually have a different generation of managers or it will no longer exist.

    The founder's acceptance of this reality undergirds and fosters management

    succession planning. Rejection of this reality stifles the planning.

    Ideally, the founder integrates management succession concerns into

    strategic planning. The founder has the responsibility of involving all

    members of the management team in strategic planning. The founder must

    also deal with the integration of plans for the business and plans for the

    family because "family issues ultimately shape the business strategy."

    Updating the mission statement causes the management team to


    continuously answer the question, Why are we in business? This question

    can easily be expanded to deal with questions of business and family values,

    human resources including employees, role in the community and industry,

    and long-run aspirations.

    The next generation has multiple perspectives owing to its composition: sons

    and daughters who enter the business, their siblings who do not enter the

    business, the spouses of the founder's children and the founder's employees.

    For each of these four groups, there are issues of career and financial

    planning, career opportunity and career satisfaction, fairness of treatment by

    the founder, and family relations.

    More than the capacity to manage the business affects the next generation.

    Factors impacting the next generation are personal need fulfillment, career

    interests, personal identity, life stage, personal influence, mutual respect

    and understanding between generations, sibling accommodation,

    commitment to family business perpetuation and separation strains due to

    family involvement.

    Management succession can be a process taking place over many years

    requiring cooperation of all people on the management team. The succession

    steps involve planning, selection and preparation of the next generation of

    managers, transition in management responsibility, gradual decrease in the


    role of previous managers and finally discontinuation of any input by

    previous managers.

    In contrast to the above process, management succession can be by crisis.

    The crisis may be brought about by the death or disability of the founder,

    divorce, threat of departure by the heir apparent, or hiring of an outside

    manager in an attempt to "finally fix things gone wrong." In the absence of

    design and implementation of a process, succession will almost certainly be

    by crisis.

    Thirty percent of family businesses in this country survive to the second

    generation and only half of these first generation survivors make it to the

    third generation. Following are five actions for management succession

    success consolidated from a list of more than 15 factors:

    1. Select managers for the next generation. A person can rarely be

    successful in declaring himself or herself the new manager.

    2. Put in place a comprehensive development program for these

    managers. There needs to be some combination of formal training,

    self-study, mentoring, communication, performance evaluation,

    strategizing about overcoming specific weaknesses and employment

    outside the family business.

    3. Provide opportunities for next-generation managers to fulfill their

    personal and career goals. Delegation of specific responsibilities and


    the necessary authority is also important.

    4. Develop plans for management succession, strategies for the

    continued operation of the business, retirement of the current

    managers and transfer of assets before and through the estate.

    5. Develop positive associations and good working relations among the

    family members in all generations in and out of the family business.

    For more information on succession planning, visit eRuralFamilies.org.

    The United States Department of Agriculture, the University of Wyoming, and Weston
    County Extension cooperate..

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