When a family business founder or leader is starting to think about succession plans, they usually go in thinking positive thoughts — about retirement, about their successor and about the company and life they have built.
What they don’t think about is the work they need to put into a succession plan, and the many roadblocks that will appear — mostly due to their own self-sabotage. It may sound harsh, but it’s the truth. All my clients in this regard have good — even great intentions. Most understand the need to create a succession plan. But too few truly understand what the process entails, and the often-difficult road ahead. The planning phase usually starts off swimmingly: We make progress in identifying goals and discuss what is necessary to ensure their business remains sustainable into the future. We also lay out steps for a successful transition to the next generation. After this planning period, everyone is usually feeling pretty great.
But when it comes time to put the plan in motion, things tend to fall apart. We have discussed many of the reasons why in past articles — founders not ready to give up the reigns, successors having a lack of experience or a difference in opinion on how to run the business. The list goes on. But what all these "transition terrors" have in common is that they are largely driven by fear, making them more difficult to identify and address. You can’t figure out emotions on a spreadsheet. But with hard work and a hard look in the mirror, a smooth succession can happen.
So, how do we get unstuck from transition terrors?
We start where the alphabet does: with "A." Acknowledge that you — the leader and the successor — play a pivotal role in the succession process. There is perhaps no bigger sabotage to a succession (and sustainable business) than ambivalence. I see this when a leader is vague about how they will transfer responsibilities over the course of the plan. And it’s the inability to let go that drives it. Many family business leaders don’t realize they may not be ready until the time comes to execute the plan. They begin to worry about their own mortality, their legacy, their very identity after so many years of living and breathing the family business. This is when leaders realize they aren’t just transitioning their business; they are transitioning their life. Recognizing these feelings and beginning to identify other interests is critical to overcoming these transition terrors.
I ask my clients to do an exercise where they must Identify their transition terrors by answering the question “What stops me from committing to a succession plan with objective goals and a specific deadline for completion?” Some examples of common transition terrors both the current leader and the identified successors have experienced:
Current leader: “Not ready to let go,” “fear of aging,” “financial impact,” “loss of identity” and “I have no hobbies.”
Successor: “Not ready to take on additional responsibility,” “I’m still viewed as too young,” “lack of financial clarity” and “minimal understanding of how decisions in the business are made.”
After acknowledging these behaviors, the key to overcoming them are three more A-words:
Awareness: I ask my clients to journal their behaviors over the course of a month, so that they can honestly identify the triggers that keep them from moving forward with the plan in a focused manner.
Addressing: Once the issues between leader and successor are identified, the best way to address them is by communicating — often. Consistent communication, where each party asks for what they need to move forward, is the key to success. Lack of communication leaves a vacuum, where resentment grows.
Action: A good action plan means agreeing to small steps to move forward. One example: letting the successor run the management meetings. But these steps must continue and build on one and another. An action plan is nothing without action.
The transition from one generation to the next is not merely a shift in ownership — it's a transformation of lives and legacies. Overcoming the often-unspoken fears and obstacles that sabotage the transition requires a dedicated, honest and well-planned approach that involves both the current leader and the successor. Through an intentional journey of self-awareness, consistent communication and an action plan with actual action, the transition terrors can be tamed.