As of 2019, PwC’s Family Business survey found that JUST 18% of family owned businesses have a robust succession plan. The study can be found here: 2019 PwC Family Business Survey
It seems there are a number of reasons given for this. Recognition that today’s economic climate offers a great deal of uncertainty, so there is a lack of time. Then, there is the thought to sell the business, which is attributed to a lack of interest in the family enterprise. There is also an appreciation for the challenges that formal family business governance present to families. For example:
Who to pick?
How is the choice to be made?
What skills and aptitudes does the next CEO need to have to successfully lead the business into the next stage of growth?
How will other family members handle the decision?
It isn’t easy making this type of decision. Hopefully, your family business is not only addressing each of these questions directly, but is actively working to develop a strategic exit strategy for the current CEO and an onboarding strategy for that next leader.
If not, I’d encourage you to contact a coach, exit strategist, and/or your financial planner to begin at once. So often outside “life events” happen to drive these types of decisions in the midst of extremely stressful situations. You are in a much better place to make decisions when those conversations are conducted with a clear set of objectives.
If you need more motivation to bring those people on board to help you get started, read this HBR article, “Siblings and Succession in Family Business”. This is an excellent cautionary tale.
Next week, I will share a set of recommendations for you to follow to get ready to create the best succession plan EVER!
Reach out to me, Wendy Dickinson, if you would like to schedule a get acquainted call to determine the support you need to get started on your plans to transition successfully. My email address is firstname.lastname@example.org, or call me at 804.372.7575.