Family Business Blog
Jun 06, 2014
Stepping Back but Kids Not Ready to Take Over
We were recently asked to contribute to Family Business Magazines ‘Brains Trust’ column. There’s only so much that can be said in 150 words, so here is a more comprehensive response.
The question:I’m getting ready to step back from running the business and while my two kids are keen to take the top job I just don’t think they’re up to it – not yet anyway. I think an outside CEO would be best but how do I tell my kids and get them ready for my replacement?
One of the tough parts about being in business with family is having difficult conversations with loved ones. If you haven’t laid the right ground work, this is one that ranks up there with the most difficult.
Preparation would have involve having clear Position Descriptions, regular Performance Reviews and an effective Family Charter. Without these you may be having this conversation at a time of stress and personal angst. In my experience these conditions are not conducive to effective decision making.
To set the frame for your conversation I believe you need to start with getting a commitment to reaching the best possible outcome for each of you as well as your business. If the objective is not only to ensure business success but that family members are given the best possible opportunity to succeed and flourish, then the question becomes much broader. After all, generally parents want to set their kids up for success, not failure.
Once you’ve agreed on a broad vision for what you want to achieve I’d suggest the following simple collaborative exercise might help you take the sting out of the conversation. 1. Identify the traits of a champion CEO, someone other than yourself! It might be someone you know, or have worked for, or it might be someone you’ve admired from afar. It could be the Richard Branson or Steve Jobs of your industry, or another impressive leaders you’ve all read about.2. List their key attributes. What made them such fantastic leaders? You might not need all of their traits, but what would it take to successfully lead your family business into the future?3. Assess yourselves against these characteristics. Click here to download a Leadership Audit. This is just a template so feel free to change the factors to those that are most critical in your family business.4. Score youselves on a scale of -5 (poor) to +5 (excellent) on each factor. Yes, include yourself! You might find it is an interesting exercise and it will certainly generate a sense of camaraderie. It may even give you food for thought.5. Then look at the performance gaps. If the objective is to rank alongside your ideal leader, where do you underperform?6. What is your time frame? If it is say 12 months, then you now have a guide as to the ground to be covered in that period and can start to develop a training and development plan.
If the lift in performance required cannot realistically be achieved within your time frame the logical conclusion might be that an outsider is needed to both mentor your kids and run the business until they are ready.
Again, this work is best done well before the issue arises. Succession is a process, not an event and the more time allowed for the issues to be worked through in a logical fashion at a pace that everyone is comfortable with, the better the outcome.
The question:I’m getting ready to step back from running the business and while my two kids are keen to take the top job I just don’t think they’re up to it – not yet anyway. I think an outside CEO would be best but how do I tell my kids and get them ready for my replacement?
One of the tough parts about being in business with family is having difficult conversations with loved ones. If you haven’t laid the right ground work, this is one that ranks up there with the most difficult.
Preparation would have involve having clear Position Descriptions, regular Performance Reviews and an effective Family Charter. Without these you may be having this conversation at a time of stress and personal angst. In my experience these conditions are not conducive to effective decision making.
To set the frame for your conversation I believe you need to start with getting a commitment to reaching the best possible outcome for each of you as well as your business. If the objective is not only to ensure business success but that family members are given the best possible opportunity to succeed and flourish, then the question becomes much broader. After all, generally parents want to set their kids up for success, not failure.
Once you’ve agreed on a broad vision for what you want to achieve I’d suggest the following simple collaborative exercise might help you take the sting out of the conversation. 1. Identify the traits of a champion CEO, someone other than yourself! It might be someone you know, or have worked for, or it might be someone you’ve admired from afar. It could be the Richard Branson or Steve Jobs of your industry, or another impressive leaders you’ve all read about.2. List their key attributes. What made them such fantastic leaders? You might not need all of their traits, but what would it take to successfully lead your family business into the future?3. Assess yourselves against these characteristics. Click here to download a Leadership Audit. This is just a template so feel free to change the factors to those that are most critical in your family business.4. Score youselves on a scale of -5 (poor) to +5 (excellent) on each factor. Yes, include yourself! You might find it is an interesting exercise and it will certainly generate a sense of camaraderie. It may even give you food for thought.5. Then look at the performance gaps. If the objective is to rank alongside your ideal leader, where do you underperform?6. What is your time frame? If it is say 12 months, then you now have a guide as to the ground to be covered in that period and can start to develop a training and development plan.
If the lift in performance required cannot realistically be achieved within your time frame the logical conclusion might be that an outsider is needed to both mentor your kids and run the business until they are ready.
Again, this work is best done well before the issue arises. Succession is a process, not an event and the more time allowed for the issues to be worked through in a logical fashion at a pace that everyone is comfortable with, the better the outcome.
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