The odds of successful family business succession goes down with each generation. There are challenges with even making it to even the second generation of family business ownership, and by the third the odds become rather steep against successful succession.
The key is succession planning. Dave Specht, an adjunct instructor at the University of Nebraska, has a very practical and entertaining overview of the challenges of succession and some of the ways to overcome them in a new article published in Family Business Magazine. From the article:
The key is succession planning. Dave Specht, an adjunct instructor at the University of Nebraska, has a very practical and entertaining overview of the challenges of succession and some of the ways to overcome them in a new article published in Family Business Magazine. From the article:
Family business owners are re mark able people, yet the sobering truth is that they are mortal human beings. When it comes to preparing for the inevitable--business continuity planning--there are four reasonably predictable ways that most business owners' attitudes can be characterized. Their thoughts and behaviors are represented here by four superheroes: Captain Immortal, Dr. Shhhh, Oblivious Man and Ms. Reality.
In reading this article I began to wonder at what time succession planning really needs to begin. Should it be at the same time as the planning for the business begins? Or is there a certain point within the growth phase when this becomes necessary? In particular, thinking about Specht's description of "Oblivious Man," I began to wonder at what point he stops focusing his efforts "in" the business and instead works "on" the business. Again it seems as though there might be a certain point within the growth stage for this. However, I also wonder if "Oblivious Man" would not be the type to already have his children involved in some way. Obviously the other two superheroes described take things into their own hands, but Oblivious seems to simply want the business to succeed. I would think that he would involve his children in the business in some small way, simply because he might need their help and/or he's so passionate about what he does, he wants them to share in that passion. Great article though!