Weekly Thoughts: March 12, 2018
"Overcoming Succession Roadblocks -
Timing, Communication,Fairness"
85% of family business crisis revolve around issues involved in succession planning. Over the next three weeks we will identify 12 roadblocks
to successful succession and offer practical tips to overcome each
One of the first roadblocks to successful succession planning is procrastination. "We have plenty of time" is used by the majority of senior generations when it comes to succession. Viewing succession as an event and not a process is also a big roadblock to the long-term survival of the family business as is poor family communication.

Time is not something we can control. None of us know how much time we have left in our lives. Succession planning is always more successful when families can work together in planning for the future of the business and the family. Families change, people change. That is why succession has to be a process . A process that is reviewed by the family every year.

Begin the process with open, honest communication by each working family member concerning their intentions for the future. Without this regularly scheduled and on-going communication the unspeakables take over. The unspeakables are those issues the family avoids yet create stress and even mistrust among the family. Communication of working family members begins with weekly meetings. Meetings with an agenda, where respect for one another is the guiding principle of all meetings. Communication and interaction based on the firm belief that the success of the family depends upon helping one another be as successful as possible. Communication that consists of keeping one another informed and never taking for granted that others know what you are doing. Communication that keeps non-working family members, who may have an interest in the estate of the senior generation, in the loop. Communication that consists of at least once a year family information meetings to help head off any misconceptions that can cause stress and a breakdown in family relationships.
How does the senior generation ensure that they will be fair to all their children even those who may not be in the family business? This fairness issue, when not properly addressed can destroy family relationships. Most entrepreneurs have the majority of their wealth tied up in the business. Ensuring the other children are properly taken care of through the use of life insurance, or a trust, or other means is an important part of succession planning. Building a proper bonus program for the next generation that allows them to accumulate the dollars needed for future ownership, should also be structured. Don't settle for one solution. Be creative. Have the right people assisting you and you will discover that there are a number of ways to be sure that fairness does not become an issue.
Kwaiserism: "Succession is a process that is ongoing and has to include fairness and open communication. Without these components, family relationships and/or businesses fail."
View our book "Transforming Family businesses" by reading the first chapter on our web site  www.kwaiser.com .

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