Dan Schneider

How Succession Planning Builds Family Harmony
January 11, 2008

So, how were things around the table at Thanksgiving and Christmas in 2007? Are you hoping that 2008 will be as good? Did your parents, siblings, in-laws, children leave you with the feeling or sense that “This is what life is all about!” or did you get up from the table making a resolution not to do this again? 

In either case, you’re not alone. Family Harmony and Family Dysfunction both have their origins in two of the most intensely personal drivers of succession success. Those would be Family Dynamics and Family Governance. And if one of your children or near relatives is the heir apparent, then we also can throw in Successor Preparation. And let’s not leave out Owner Motivation and Perspective. But we’re getting ahead of ourselves.

Integrated Succession Planning builds value. Not only for the business, but also for the family. An integrated plan is based on certain assumptions and expectations. If those assumptions and expectations aren’t clearly communicated, the owner must rely on family members and business partners who have ESP in order to have his/her goals for family members met. So, how do we move away from chance in building healthy family dynamics and family governance practices?

Since much family and business conflict stems from unmet expectations. One party assumes, incorrectly by the way, that he/she knows what the others want because it is what they want for that person or persons. The easiest way to build value is to ASK others what they want out of the business, the family, etc. The hardest part about asking, however, is that you must then LISTEN to what they say.

If you’re the patriarch or matriarch of the family and the business, and if you’ve defined success as having a particular son or daughter at the helm of the business, you may not like what you hear. And the longer you wait to ask, the more staggering the answer may be.  

To help you begin building this value early, here are a few suggestions for you to consider in setting up the conversation. 

• Begin with end in mind. Share your vision and focus on the role you see the potential successor(s) having.
• Focus on first things first. Find out if the next generation is interested. Let them know they have a choice and that working in the business is not a requirement for continued love and support. A decision not to be involved in the family business is not a rejection of the family. It’s an affirmation of the individual.
• Recognize early on that children who do not have the availability, competency, or commitment to be part of the business are not done a favor by being “forced” into it.
• Be prepared to redefine success. If you have hung your success legacy on whether or not your children or other family members will be part of the business, then you have set yourself up for a potentially titanic disaster, at least on the personal front. To paraphrase an old Ugandan proverb: Sail slowly through the icebergs.
• Create a Personal and Professional Development Initiative for those who want to join the business. Include Self-Mastery Skills, Interpersonal Skills, Academic Skills, Business Skills, and Academic Skills in the plan. 

Remember that in a certain way, you still have to sell the value of your business to your family. In order for them to incorporate your vision into their lives, they need to know what’s in it for them.

Posted by Dan Schneider on January 11, 2008 | Comments (0)