One reason family business succession planning is so trying is that it requires family business leaders to think long-term when so many are heads-down, focusing on near-term, day-to-day priorities. For succession planning to be successful, current Leading Gen CEOs and other senior executives who have spent decades becoming experts in their fields must also accept it’s time to pass the baton to their NextGen successors.

While senior leaders may think their retirement is well off in the distance and that their NextGen’s will be there when needed, high-performing families start these critical activities early to preserve their legacies and ensure generational continuity for their family businesses.

Stepping Down or Stepping Up

NextGens often assume role-appropriate positions in their organizations. In other words, they regularly perform their assigned functional responsibilities and subordinate themselves to their current family business leaders just as children might defer to their parents. For NextGens to be successful, they need to start acting leader-like, not childlike as they may have in years past.

The following are four key actions NextGens can take to facilitate the transition into higher-level positions:

1. Leverage your current leaders as mentors with institutional knowledge and proven capabilities you can learn from to gain greater exposure to the business and industry
2. Share your strategic vision and present specific recommendations for changes
3. Champion those innovation projects to improve the business based on your own insights and ideas
4. Be respectful of your Leading Gen executives’ positions and ultimate decision-making power as the ones in charge until you are promoted and assume control yourself

A New Type of Leadership

While family business leaders regularly focus on how their NextGens can’t fill their shoes and do what they do, it’s important to recognize businesses likely need new types of leadership to be sustainable and face new challenges, not more of the same.

By identifying changing business requirements, NextGen leaders can learn to adapt and address them. Markets shift and customers’ requirements evolve. Some family businesses may need to scale up from being regional to national if they’re going to survive. Other family businesses may need to embrace and implement new enterprise technology solutions to drive their organizations forward.

Whatever the changes might be, future executive leaders will probably require a different set of skills and approaches to lead. As NextGens assume these higher-level positions, they don’t need to be mirror images of their parents and other Leading Gen executives. They need to be themselves and bring their own unique talents and competencies to their elevated positions.

Mentoring & Coaching for Success

As NextGens chart a course for their future and the future of their family businesses, it’s imperative they seek help along the way. These elevated NextGen roles will require new competencies than have been required in lower-level functional positions. Hence, NextGens will require support to be successful as they assume greater responsibilities in their family enterprises. That is why Leading Gens who can pivot from being active managers to serving as supportive mentors can be the key to success with succession planning.

Focusing on Legacy & Business Continuity

It is the responsibility of every family business leader to look to the future and create sustainable enterprises for future generations. Senior Leading Gens need to recognize they aren’t going to be the ones running their family businesses forever. We can celebrate your many professional accomplishments and accolades, but if you aren’t going to close the doors on your companies or sell simply because you are moving on, then you need to make room for your NextGen successors to step up and support them in their elevated leadership

Leadership transitions like this don’t have to be personal or contentious. It’s about preserving the legacy of our family businesses and ensuring continuity for generations to come.

 

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

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.