Ambivalence Concerning The Development Of A Succession Plan

The founder letting go of his business can be compared to a father leading his favourite daughter down the aisle. He knows he has to let her go; he did not choose his son-in-law and yet he has to hand over his precious daughter for better or for worse and trust that things will turn out all right. (Anonymous)

While owners might be aware of many sound reasons for developing a succession plan, they usually experience feelings of ambivalence regarding the management of their exit. Feelings of ambivalence might relate to:

Fears of losing an important part of one’s identity. The enterprise is often their most significant creation. Their business provides them with a sense of pride, accomplishment and much satisfaction. The thought of separating from the organization can be disturbing and painful.
A reluctance to face one’s own mortality. This is not an easy task for most people, let alone entrepreneurs who typically guide their life in the firm belief that they control their own destinies. For entrepreneurs, succession planning is akin to a premature death ritual: it means coming face-to-face with one’s mortality.
Strong needs for power and centrality. Owners often make themselves indispensable to their businesses, resisting devolving authority and insisting on being involved in decisions that can be handled at lower levels in the organisation. Thus, the idea of renouncing control of the firm can be experienced as the first step towards relinquishing control not only of the firm but also over life itself. This is one reason why owners often retain ownership control of the firm until their death. Research shows that over 15% of Australian family business owners are over the age of 65 years, including 3% who are 75 years or older.
The belief that one is being demoted from a position of centrality within the family (i.e. as the leader, role model, breadwinner, states person or entrepreneur). Many owners want a meaningful role in the family business for as long as they are involved and into their retirement years.
Feelings of rivalry and jealousy towards the potential successor. These feelings, for example, can become manifest in expressions of distrust of the successor's abilities.

In the face of any feelings of ambivalence regarding the development of a succession plan, owners face a number of challenges including:

realising that the succession process is going to be a bittersweet experience;
confronting one’s own mortality in a real and compelling way;
separating one’s personal identity from the business;
preparing to let go of power;
identifying new goals for life;
cultivating a team approach to top management; and
seeking post retirement interests and activities.

Professor Kosmas Smyrnios. This paper has been adapted from his recent book, Family Business Succession Planning: A 10-Step Guide (2000). Centre for Professional Development. Tel. +61 3 9205 0600. Professor Smyrnios can be contacted on +61 3 9925 1633
First published: 28 May 2001.
Last updated: 11 November 2004.