THE 7 STEPS TO A SUCCESSFUL TRANSITION

The context

For succession to occur, it is necessary for the manager to be willing to pass over the management of the family business. Managers often only begin to understand the importance of transferring the business when they are no longer capable of managing it themselves. In such a case, the new managers are not sufficiently prepared for their new role, and the succession may bring obstacles.

The solution

The manager's motivation is the triggering factor for family business succession, but for a successful generational transition, it is important that visions, expectations, and plans are mapped out early.

The context

Motivating successors is a common challenge in family businesses. The engagement and willingness of the next generation play a crucial role in ensuring a successful succession process. Without this motivation, there may simply be no suitable candidate willing to take over the company.

The solution

Managerial support can also play an important role. When the current leader gives the successor opportunities to participate in decision-making or influence the company’s direction, it can strengthen the successor’s motivation to take on responsibility for the family business.

Also, start successor engagement from early age and show that business can also be fun (through fun activities such as sports games, trips and other).

The context

Succession is a complicated process. There are many obstacles and unknowns. Most family businesses lack internally the specific knowledge required to carry out the transition successfully.

The solution

Case studies show that professional advisors such as governance experts and lawyers specialising in family business transitions can deliver the requires know-how and expertise to carry out the  transition successfully.

The context

Insufficient education or education which is not in line with family business could be detrimental to successful transition. The successor might lack crucial knowledge necessary to take over the management.

The solution

Research shows that successors' education combined with a clearly defined succession plan increases their motivation. Well-educated successors:

• Are more likely to view succession as an opportunity
• Are more confident introducing innovation
• Are likely to improve governance

The context

Older generations tend to prefer traditional methods and stability, while younger ones want to apply their own perspectives and management styles, which may differ from established practices. Problematic are situations where the older generation tries to assert its control while making decisions without considering the wishes and expectations of the next generation.

The solution

Resolving and preventing conflicts requires an understanding of the differences between different generations, in order to avoid possible deadlocks. Conflicts can be prevented by early open communication between family members.

The context

Next-generation members develop a strong desire to pursue their own initiatives. If these exploration needs go unmet, members can feel trapped and disengaged. Also, experiential learning is crucial to gaining entrepreneurial mindset.

The solution

Satisfying next-generation family members' exploration needs fosters their entrepreneurial spirit.

Don't provide a conventional master-disciple transmission of knowledge — instead motivate learning by doing, making mistakes, and drawing personal conclusions.