The birth of Prince George Alexander Louis to Prince William and Kate Middleton gives the House of Windsor a living fourth generation heir to the throne. Prince George will undoubtedly need to wait 60 or more years until he ascends to that throne given the longevity that runs in his bloodline. His grandfather, Prince Charles, has been waiting 64 years, and since the throne is not something royalty retires from, it may be a much longer wait indeed.
Letting go the reins of power is something most business owners struggle with, so preparing successors is something they should consider carefully, especially if you’re keeping it in the family. Tonya Layman with The Business Journal reports that most family-owned businesses don't have a succession plan. Here are some tips for preparing to let go of the family business and preparing for succession:
Help the next generation develop capabilities. You undoubtedly will feel more comfortable handing a business over to the next generation if he or she has developed the proper capabilities to run the firm. For a family business, that may mean letting a son or daughter work outside the business for a number of years to gain invaluable experience in a different setting, and then applying what they’ve learned to the family business.
Share interests. Don’t try to pre-determine the roles your children will play in the business; instead, expose them to a number of different disciplines so they can find their own niche.
Share power. To train the next generation to be good stewards of the family business, you need to let them make and own their own decisions, and both enjoy the reward and learn from the consequences. A tree that grows in a biosphere can’t stand up—there is no wind that allows the tree to establish integrity and strong roots to support its weight. Likewise, sharing power and decision-making in addition to rewards and consequences lead to sustainable growth and prosperity of the business.
Bow out gracefully. Once you’ve passed the reins on to the next generation, learn to respect their decisions and don’t try to insert yourself in areas where you no longer belong. Let them know you are available to share your experience but don’t try to force yourself on them. Otherwise the outcome is inevitably family conflict and destabilization of the business.
Have a clear succession plan. A legal succession plan is vital to making the process smooth and predictable. Choose the successor, develop a formal training plan for the successor, establish a timetable, prepare for retirement and install the successor. No matter how small or large your business is, a succession plan is a must.
Succession planning takes years. Experts generally estimate that succession planning should begin 15 years before retirement. This provides time to oversee the successor as he or she learns the business and hones his or her skills.
Consult with family business experts to create a plan and regularly communicate intentions to business leaders and family members.
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