5 essential tips
Here are pointers to help business owners proactively manage emotional issues in family successions.
1. Give yourself lots of time to plan and execute your plan
You should give yourself at least two years. Family business transitions take much longer than many entrepreneurs realize.
2. Formalize your family succession plan
A formal plan will help you avoid disagreements down the road. It’s essential to maintain an open dialogue with family members as you prepare the plan and get them involved. Keeping them out of the loop can sow family discord.
3. Communicate how the plan will unfold
Once the succession plan is finalized and your successor chosen, communicate a clear action plan for the coming months and years to family members and employees. Reassure them that you will have the mentoring and training in place to develop your successor and that their interests will be considered.
4. Define roles and responsibilities
A family member might be a stakeholder in the business, but that doesn’t necessarily mean that he or she has the right to be involved in daily operations. By clarifying roles—especially in areas such as who is responsible for day-to-day management versus who has a say in the strategic direction of the company— you can avoid unnecessary misunderstandings.
5. Be sure you have clearly defined job description
Outline job responsibilities and what employees need in terms of experience, skills and education. Detailed job descriptions will help you address conflicts in the hiring of relatives. After all, you don’t want to feel obliged to hire family members to do a job for which you believe they are ill-equipped. At the same time, you shouldn’t pressure family members into accepting jobs that they aren’t suited for or interested in.