You may be a fan of the HBO series Succession. It's about the world's least likeable family who are battling it out for control over their empire (not to mention fatherly approval) when patriarch Logan Roy's health becomes uncertain.
Fortunately, I’ve never had to work with a family like the Roys that aren’t interested in a planned, orderly transition of an enormous enterprise from generation to generation. But I have worked with many families that do want to anticipate and plan for succession within their company.
It's a good thing they do. After all, approximately 90% of US businesses are family owned and not only employ family members, generate family wealth and create a family legacy, but also contribute significantly to the GDP and are among the country's largest employers.
That said, we are talking about families here, and as members begin to think about transitioning leadership from one generation to the next, all sorts of questions and challenges arise.
So, how does Quinn Strategy Group manage these types of transitions without turning decent families into dysfunctional Roys?
We start with a conversation about shared values. Revisiting or uncovering shared values lends authenticity to the process, bringing people to the table rather than alienating them. This is also the start of helping family members determine the vision for their business in the future and the role each owner will have in that future.
Creating a vision for the future of the enterprise allows the owners to understand where they are driving the business and what capabilities and capacity will be needed to get there. The goal here is not to craft a full strategic plan (although all businesses need that too). Rather, it's to define the future enterprise so that the owners can align their roles and goals in support of that vision.
We often use a business maturity model to help evaluate aspects of the enterprise and, ultimately, identify where to focus in order to create an even more sustainable business model going forward.
Most large family enterprises have a couple of areas that are more developed than others simply based on the owners' skills and expertise. For example, they might have a mature leadership model that includes a shared vision, accountability process and decision-making tools. Then, there will inevitably be aspects of the enterprise that are less mature. Perhaps the strategy is poorly articulated, held primarily by the owners rather than shared and embraced throughout the entire enterprise.
One family business I worked with had a shared value around hard work, so they hadn’t invested in increasing the capacity needed to support their organization as it grew. Their approach had always been to just work harder, adding more and more responsibilities to each of their plates. Not very sustainable, right?
So, once the future vision has been articulated and the family has identified where they need to develop capacity using the business maturity model, it is much easier to discuss how the owners' roles will evolve.
The two key questions we ask at this point are:
What is each owner doing now in the business, and is that role aligned with the highest and best use of their abilities? And, as the enterprise grows, can the existing owners support that growth or will new managers be needed?
Introducing management from outside the family can be tough for businesses where family members are both owners and operators. In these situations, it can be scary and feel foreign for family members to let go of some operating decisions. If you use shared values as a guide for hiring, it will be easier to find a candidate who's a good management style and culture fit. It also helps to fully define each family member’s new role.
The great news is that all of the work we do with family-owned enterprises up to this point has laid the foundation for us to facilitate productive, rather than destructive, discussions around these challenges — as well as positive solutions that not only strengthen the business and its future but also family relationships.
What's important to remember is that if your goal is to build a business for future generations, passing the baton to the next generation is a natural part of achieving that goal. But it’s imperative to get the hand-off correct.
Planning ahead, creating roles for family members that best use their skills and communicating throughout the process are cornerstones of a smooth transition. Yet when family is involved, things can get tricky — even if the owners have worked well together up to this point. Experienced transition facilitators can be an incredible asset to family enterprises navigating the succession. They have a proven approaches and tools to share, but what they don't share is your family's DNA.
