Succession transitions are not jut about handing the keys over to a successor. Outgoing owners have a role to play in preparing the incoming successor for success in the role by providing the following four things...

Multiple qualified individuals primed to take over the company should be the source of great encouragement. It takes a balance of communication and planning to avoid jealousy or in-fighting.

In some cases, successors will reject your offer and the company altogether. In those scenarios, it’s crucial that owners understand the employee’s perspective and take appropriate corrective action if necessary.

The New Year is an opportunity to look at the past and reorient both ourselves and the business for the future by kicking off the continuity planning that will ensure your company and your legacy endure.

A successor may not always jump at the opportunity to carry on the legacy of the business. When a successor declines the offer to own or manage the business, understanding their motivations is key to finding a solution that benefits all parties and the business.

By the second or third generation or in high-performing businesses, the issue often isn’t a lack of successor candidates, but an abundance. If it isn’t handled with care, chaos could ensue. The selection should be handled with early and frequent communication.

In a business, bringing in an external successor could create its own set of challenges. However, external successors could provide a functional bridge for the business and should be treated as an opportunity to strengthen the company.

An owner may need to release a family member from the business. Firing family is a tough decision needs to be communicated with tact and without ambiguity to preserve both the family and business relationship.

Owners with successors from different backgrounds can upset previous communication norms and challenge the operation. This is avoided with good alignment and preparation.

When an owner finds that perfect successor, then, the tendency is to jump for joy and declare his or her mission accomplished especially when that chosen successor comes from a similar background and shares the owner’s expertise. Owners should fight that tendency.

The Foundation conversation in a family owned business occurs between the owner and potential successor and gauges whether their desires are aligned to start the succession journey.