Managing Succession in the Family BusinessFamily businesses are the cornerstone of the British economy
Succession is widely held to be a central management issue – or perhaps the central issue – in family businesses.
The issue of succession is inevitably linked to the retirement plans of existing family business owners in the UK, with many not having any defined exit strategy, so it becomes even harder to provide a given formula to transitions.
A multi-dimensional understanding of succession and exit is needed, with a clear distinction between the ‘hard’ dimensions of formal role and authority and softer, less tangible dimensions embracing elements of human and social capital such as knowledge, relationships, networks, leadership, and commitment.
The duration of the succession process is dependent in part on the processes of personal development of the successor(s) and on many other organisational and external variables The perceived wisdom from many of the legal and accountancy professionals on the ‘succession planning issue’ is rooted in ‘things to do’, ‘plans to be made’, problems to be solved, difficult personal conflicts to be sorted, all following some linear path that makes sense to the people involved.
At the other end of the spectrum there is the view that the ‘succession issue’ is rooted firmly in the reluctance of the founding family entrepreneur to ‘let go’. Much of the research concentrates on the psyche of the entrepreneur and in particular issues of immortality and fear.
Succession in a family business only really succeeds optimally when it is prepared for in an atmosphere of joint commitment and when the process, which is inevitable, is viewed as confirmation of success.