Continuity benefits and avoidable risks
Why does investing in successors to your family firm matter?
The investment of time and resources in the preparation and development of successors has a number of benefits for the continuity of the family business.
The most impactful is the preparation and support of successors for family and company leadership. Timely development can facilitate a clear understanding of available roles, professional fulfilment and effective career decision-making.
With the achievement of ‘informed opportunity', individuals may assess the role possibilities in front of them alongside those on offer external to the family business.
Preparation and development of successors will permit successful succession within and between generations.
Availability of resources for development allow the management of succession ambitions between grantor (accessor) and grantee (successor): an opportunity for the initiation of conversations between family members.
For the senior generation, structured development can provide a way to attract and assess family members, alongside (and independent of) efforts to recruit non-family managers.
Where families have commenced activities to ensure ownership succession - such as the establishment of a family council - structured development provides the opportunities to encourage and involve successors as a route to future leadership positions.
Finally, there are a number of important benefits for successors who dedicate the time to structured development.
First, the chance to achieve clarity in what they are trying to achieve (role-perception) and improvement in current role performance.
Second, the opportunity to plan and develop their own career path in the family business in consultation with senior members of the family and company.
Third, the skills and confidence to articulate and commence the succession conversation, referred above.
Fourth, the opportunity to learn alongside other successors, their peers.
And finally, the incentive to contribute to continuity of family ownership on their terms.
Avoidable risks for the family
A lack of investment of time and resource in successor development ignores the challenges successors face. Successors must learn - and unlearn - more than anybody else, why not facilitate their success?
The primary risk in not doing this is that successors vote with their feet and look elsewhere - non-attraction of family talent at a time when all talent is scarce.
Second, why not take the time to assess suitability for a career before a commitment to employment is made? Early stage development is designed to address this. The risk of non-alignment with the aptitudes and skills necessary to succeed in the family business are real and hard to undo once an offer of employment is made and accepted.
Finally, those working in the family company face the challenges of setting their career path and achieving credibility along the way.
They will face critical points in their career where the opportunity to review, re-set and re-engage is not only welcome but essential.
The risk of career derailment is real, with potential consequences for the company and family. Availability of development resource, a qualified mentor and peers can go a long-way to mitigating this risk.