Key Insights & Lessons In Family Business Succession
In his insightful book ‘Succeeding Generations’, Ivan Lansberg refers to a number of key lessons in family business succession which have been summarised in this article.
The succession planning process:
- Enables family business owner-managers to investigate their business continuity exit options and strategies and the implications of each.
- Provides family members with the opportunity and the forum to discuss their needs and aspirations, articulate a shared vision for the future of the business and the family, and establish a framework for balancing the short and long term needs of both.
- Anticipates future challenges and provides the opportunity to develop appropriate policies, create effective governance structures and processes, and regular family business meetings to enhance communication and conflict resolution.
- Requires incumbents to adopt a constructive and consultative style of leadership and requires potential successors to show that they are both willing and able to assume the leadership.
- Requires family members to develop a spirit of inquiry and commitment to lifelong learning and exploration on the understanding that the succession process stands or falls on the family's capacity to build trust and foster collaboration.
Ivan Lansberg also arrives at a number of conclusions which can increase the likelihood that the succession process will be successful. We have summarised them as follows:
- Successful succession planning requires a pro-active investigation of all the options available to the family in business, and of their implications or consequences.
- For the succession process to be effective, family members need to be encouraged to articulate their wishes and expectations and to define their common future in the form of a Shared Vision or Dream, the feasibility of which needs to be reassessed regularly.
- Essential steps in the succession planning process include: balancing the short and long term objectives of the business by identifying the family’s needs; anticipating future issues and challenges; and developing policies, processes, and governance structures to address them.
- The ultimate success or failure of the succession planning process depends to a large extent on the family’s ability to build trust and foster collaboration. It requires a spirit of inquiry, a commitment to lifelong learning, a consultative style of leadership, and responsible followers.
Source: Lansberg, I. Succeeding Generations. 1999, Harvard Business School Press pp. 329-341 to which readers are referred.
Author Credits
Lucio Dana is a family business adviser & facilitator; lecturer in Family Business Programs at Monash University; and Managing Director of Creativity in Business P/L. which trades under the business name Family Business Dynamics. He is co-author of Family Business Succession Planning: A 10-Step Guide, 2000 Centre For Professional Development; Email ledana@go.com; Ph/Fax: 03 9841 5115