Successor Success
Usually the greatest wish of the retiring business owner / leader is that his / her successor succeeds. Succeeds in growing the business; in generating strong dividends and wealth for the owners; in enhancing the contributions and job satisfactions of the team members; and in stewardship of the values and vision. And perhaps even in gaining as much personal fulfilment and reward as the retiree did!
This is hard enough to orchestrate in a corporate or large family trust, where the selection of the new leader will be undertaken by the Board (with varying input from the retiree), choosing between a slate of internal and external candidates – all proven high-calibre professional CEOs. This issue was canvassed last month, where the largest and oldest family trusts went for outstanding professionals from outside the family. It is a much greater challenge for the majority of New Zealand companies, which are family owned and too small to separate their owning and executive functions.
Putting aside the fraught matter of selection of the most able, how to develop and prepare one of the next generation (son, daughter, nephew, niece) to take over the reins? Particularly for fathers and sons, the personal and business relationship is a tricky, complex one. All father-and-son relationships have an element of competition, which is most acute when the son is a teenager or young adult. Over time, the discord and challenge of these years moderates into acceptance, forgiveness and even admiration. As Mark Twain told us, “When I was a boy of fourteen, my father was so ignorant I could hardly stand to have the old man around. But when I got to be twenty-one, I was astonished at how much he had learned in seven years.”
Dad is often unskilled in teaching (remember those shouting matches around the Maths homework?), and may also lack confidence in his command of the “syllabus” of professional management. To address both these barriers to learning, the chosen successor needs to learn the finer points of management and business leadership from skilled professionals. Tertiary courses and continuing education are musts. Another useful policy is to work one’s “apprenticeship” at another firm, so making one’s mistakes on other peoples’ money! Additionally, especially for mature heirs back in the family firm, a good solution is to engage a mentor – an empathetic, experienced and successful businessperson who has the time and ability to impart the learning.
A mentor brings the following benefits:
- A trusted neutral interposed between father and son
- Professionalism and principles in management
- Confidence and emotional support
- Motivation
- Questioning
- Focus and disciplined habits
- Impartiality and confidentiality, especially in the interface with Father
- Help in identifying strengths and weaknesses without Father’s “help”
- An independent view for Father in the ultimate question “Is he ready?”
The engagement needs to have Father’s buy-in and let-go, so that the necessary space and empowerment can be achieved, for the heir to develop to full potential.
Over recent years, four fathers and sons have entrusted me with this important work. It has been a privilege and a delight. These sons are now accomplished and ethical leaders of businesses, and have long discarded their “trainer wheels”. Our relationships have now evolved to those of Leader – Privy Counsellor / Mate.
However you choose to ensure a successful succession, may I wish you wisdom in balancing your aroha and responsibilities towards the family and the business.