Every Family business owner thinks about succession, but few would actually plan for the transition. For business owners, transition indicates retirement or death. I, however, would urge senior business owners to think of succession because once they leave, their companies may lose the resources and capabilities to compete in the future.
Senior generation leaders often are the resource pool for their companies and the basis for its competitiveness. They are what I call the "familiness" of the firm. Familiness is a term that measures how critical a family member's influence is on the resource pool of the company. I assess this familiness factors as an "f+" or "f-". A successful senior leader can contribute many "f+" resources and capabilities to the company: years of experience in the industry, the ability to teach and consult, numerous certifications, the broad networks, governmental partnering capabilities that bring in the company's contracts, and professional reputation. In the meantime, a family member may have some "f-" familiness that constrain the company's future. For example, he or she may have poor communication with the next generation successors: not teaching or guiding them, not planning for the future growth of the business or professionalizing the business processes such as budgeting, marketing and personnel practices, etc.
To ensure the future of the business, a senior generation leader needs to develop a familiness succession plan. Such a plan has three parts: picking, building and transitioning resources and capabilities. Picking is bringing replacement resources in from the outside, such as hiring or partnering with other safety specialists. Building refers to enhancing resources you already have, such as putting intellectual property into written books and materials. And transitioning is moving resources to other places, such as passing on the network contacts and industry knowledge to the next generation leaders and having them become part of the brand for the future.
A company is only an on going business if the senior leader's resources and capabilities exist for the next generation. Taking a familiness perspective means changing your idea of succession from an end-of-life conversation or a dry set of documents into a lifetime of business leadership and development.
