It is a known fact that family businesses , at least most of them, do not plan for succession. It has recently been estimated that as many as 75% of family businesses have not planned in passing on the baton and who the chosen next leader of the family business is.

In many family businesses , succession can be as simple as the oldest child or immediate family member taking over once the current leader steps down or passes away. However, consideration should be given, whether said family member is even interested in taking over. Quite possibly his/her interests could be away from the family business.

Sometimes, it can also be the case that the next up and coming family business leader may follow the path of working away from the family business, in yet another company possibly of similar business interests , gain the necessary qualifications and experience, and , then return to the fold to take on the mantle of family business leader.

Returning to the fold is not as straightforward as an automatic choice due relationship, the family business leader would and should endure a rigorous process selection to ensure that necessary attributes as well as values will best serve in the success of the family business.

Ultimately it is the individual s capabilities not DNA that should determine how qualifiable he/she is to take over the business. Quite possible external sources might also be engaged to compliment a winning formula at the helm of the organisation.

When the next gen family business leader is on board , immediately, and , in the interest of the continuity of the family business , it would be best for a succession plan to be put into motion, grooming the successive next gen family member. Were it the case that recruiting the new leader is not readily available from within the family then quite possibly searches might need to be considered away from the family.

An honest approach into assessing the family business’ needs should be looked into. What is it that the Family Business truly needs to carry on steering it on the right path and guaranteeing success in the longer term ?

A number of advantages lie in advance planning towards succession. Main advantages would be that processes can be reviewed , dynamics can be changed and goals may be attained. Candidates can be properly vetted in order to avoid picking the wrong candidate.

There is a golden saying “ Don’t set up for failure by failing to plan”. The process of planning for succession now would ensure that the process is smooth , efficient and prevent having the right person come into the wrong situation. At the end of the day, no one plans to fail but many fail to plan.

Everyone knows that sometimes things do not work out quite the way that they have been planned. It therefore follows that as with many things in life a succession plan need to be refined along the way to ensure a successful outcome.

At the Family Business Office we can offer you assistance in dealing with family business succession planning issues through incentives supporting advisory and mediation services. Contact us today on familybusinessact@gov.mt.

(All factual and statistical information presented in this blog has been obtained from an extract of an article from the entrepenuer.com) Follow us on our Facebook page and Family Business Office website at www.familybusiness.org.mt