Succession In The Family Business - Passing The Baton

The succession planning paradox.

Without an effective succession process the family business is unlikely to survive its founders/owners. Notwithstanding the critical importance of succession planning to the continuity of the family business, Family Business Surveys indicate that most family businesses have not documented contingency and succession plans.

The paradox of succession is that it is considered to be the critical issue in family business and yet, there appears to be a reluctance to plan and a reluctance to seek outside advice to assist with the planning process. The purpose and value of planning is ensuring that the options facing owner-managers and prospective successors are fully understood and the process of generational transition occurs as smoothly as possible.

Succession comparable to a relay race.

In their book on family business succession The Final Test of Greatness (1992 Business Owner Resources , at pp. 3, 9; & 26 -8) C. Aronoff & J. Ward suggest that critical aspects of the well-planned succession can be compared to the graceful exchange of the baton between runners in a relay race.

"Like the hand-off, the leadership transfer is almost undetectable to the spectator, and yet it requires stamina, discipline, conditioning and shared goals. It also demands a measure of artistry - the teamwork required to pass the baton smoothly at full speed, with the runners neither missing a stride nor stumbling over each other as they pass, and certainly not dropping the baton.

No athlete, no matter how swift or skilled, would enter a relay race without first practicing the transfer of the baton. Step by step, the runner learns the graceful exchange needed to accept the responsibility of team leadership from another.

The same is true of the family business successor. Once designated he or she must practice the skills of leadership. By the time the founder and successor pass the baton, they complete the transfer at full speed. The result: a continuity that sustains the team's overall momentum while bringing new energy and power to the race.

Much is at stake. Imagine the consequences in a relay race if the runner passing the baton does not get out of the way: a stumble or a collision, a dropped baton, or even permanent injury to the athletes. And if the baton is passed too late, all is lost - including the race.

A great succession is one hardly anybody notices. It is a non-event, an evolutionary process arising from careful planning and artful management of expectations over a period of years. By the time the baton is finally passed, the word around the business should be, 'Oh, that's what everybody expected'."

Leadership, planning, practice and teamwork.

The analogy is not meant to imply that succession has the same linear simplicity of the relay race. Nevertheless, like the passing of the baton in a relay race, a successful succession is the result of leadership, planning, practice and teamwork.

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