A Gordian Knot is a complicated problem where bold action achieves an otherwise elusive solution. In family business, the complicate problem is how to setup a succession plan that taps one or more family members (and sometimes a “near” family member–someone who through loyalty and years of service has become like a family member).
Having had countless discussions about planning for succession, two things rise to the surface as worthy of addressing here. First, there is a tendency to unfavorably compare the successor to the one he/she is replacing. The comparison typically goes something like this: He/she is “no [insert name of leader being replaced].”
Even when one accounts for the difference between the stage of each individual’s career (one is getting ready to leave while the other is near or at a mid-point), there are other factors that make such a comparison unfair. Specifically, the business has “grown-up” reflecting the strengths and weaknesses of its leader. Of course, a successor will be a relatively poor match to what is, in essence, a custom designed business based on the profile of the current leader.
Also, there is nothing that prepares one for leadership like leading. Being in the shadow of an effective leader or even an ineffective leader, is like drafting in a bike race. The real work is at the front.
This is all to say that comparing a future leader to a current leader is a distraction, at best. Better to answer the question, “does the future leader have the potential to lead the company going forward? Giving it and the people in it what they need from now on, not what they and it needed yesterday?”
Second, there is not enough emphasis placed on getting a potential successor experience in other positions and industries than the one she/he is in line for. Such diversity of experience “seasons” a leader and provides perspective on issues and management that is impossible to get while serving in a single organization. Admittedly, it takes courage to leave the known for the unknown. But the reward is, as is said, “priceless!”
There are other lessons for improving the chances of a successful succession like independently reviewing performance, independently assessing leadership potential, interim leadership until a successor is ready, mentors or peer advisory groups for the successor, etc. But the bold action is to determine if the successor has the potential to lead going forward, early on, and then test that potential and reinforce it by having him/her take a position in another company for at least a couple of years.
Contact us if you have questions, feedback or want some assistance addressing your Gordian Knot.