Don't think of it as 'Succession Planning...'
by Kelly LeCouvie and Jennifer Pendergast
Succession planning is an important process for any business, and particularly for family owned businesses. While family businesses often outperform nonfamily businesses, their succession planning can be more complicated due to the family dynamics that may overlay both ownership and leadership transitions. Jennifer Pendergast and Kelly LeCouvie share their wisdom from years of experience guiding families to successful generational transitions in their new book, Family Business Succession: Your Roadmap to Continuity. The title of the book is inspired by a critical insight that Jennifer and Kelly share in the excerpt adapted from the book below; that the nature of family business transition planning requires a more comprehensive and long-term view that we refer to as continuity. This article is the first of a series this year that will explore the various aspects of continuity planning in the family enterprise. We invite you to join us as we explore this topic in future issues.
- Stephanie Brun de Pontet, Editor
Although "succession planning" is the term many use to describe the strategies and processes to pass leadership and ownership from one generation of owners to the next, we find it useful to define the process in terms of continuity. Succession connotes an event, something with a defined beginning and end. Continuity, on the other hand, suggests an ongoing process.
This distinction is important because succession planning is really a lifelong process, one that merits the ongoing attention of multiple business stakeholders and one that should always be on the owning family's radar. It is critical to recognize that the process is never really complete. Ensuring continuity requires careful thought and planning, a great deal of discussion which includes family members as well as nonfamily management and the board of directors, and an ongoing focus on what the family wants for the future of the business and for themselves.
Continuity planning requires proactive effort. By the time a son or daughter is in a leadership role, they likely have grown children who, in turn, are thinking about their future in the business. Continuity planning requires consistent attention so that progress is smooth and systematic. That makes continuity planning a mindset, a part of the family and business culture and an ongoing effort with essentially no conclusion. The focus is not solely on passing the business from one generation to the next, but establishing a clear rationale and purpose for continuity of the business, one that supports the family's mission, values, and goals.
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