Smart Strategies to Select a Successor for Your Family Business
Admit it or not, family-run businesses constitute the majority of the enterprise pie. Most of these businesses start small and has expanded dramatically over the years. Now the problem is, the heads of the companies, be it the patriarch or similar to that does not live forever. Sooner or later, they are bound to choose the successor of the company. If you were that patriarch, how would you choose your heir?
Gallup Business Journal notes that choosing the right person would mean that you are putting the future of the company in the right hands, being able to fuel the needs of the company and drive it to its fullest potential.
Developing a succession plan for a family business can be tricky, Jessie Gubbins writes. “Family-run enterprises face unique challenges balancing traditional family succession planning and what’s best for the future of the company.” It’s important to understand the strengths of potential successors and use key metrics to evaluate their performance and leadership capabilities, Gubbins writes.”
Choosing the right candidate is not a one-shot deal. It requires a long and tedious process to ensure that the right person is chosen to lead the company in the future.
1. How can a candidate’s strengths contribute to the company?
It is one thing to determine the leadership talent of a candidate and it is another to relate this talent with the vision of the company. With that in mind, it is also crucial that the leadership environment of the company is conducive to the development of the candidate’s potentials giving him greater room for business success in the future. With the right performance tools present in the company, leaders can measure how well a candidate can perform when the time comes. By allowing the candidate perform in the company, leaders can pinpoint what aspects of the skills can be improved and the likes.
2. Are you giving your successor the kind education to begin with?
What makes a family-run business unique is that there are many leaders to choose from, that is, if the current leaders are able to educate future generations about the business. In addition, a family-led corporation also entails that many family members have a role in the company. With that in mind, the right education, apart from the right opportunities can pave the way for successors to be more in-tune with the goals of the company. To do this, current leaders should have a plan to ensure this and one way to do this is by mentorship, allowing the heir to move up the ranks.
By doing so, a family corporation can maintain its status and standards for generations.
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