Don’t Let the Failure to Communicate be Your Business Succession Plan’s Downfall

Posted by Meaden & Moore on Jul 8, 2024 3:13:42 PM

Part 8 of the "Process-Oriented Approach to Family Business Succession Planning" Blog Series

In family business succession planning, thorough and detailed communication is essential. Consider a scenario where a business owner reveals a succession plan that appears comprehensive at first glance but, upon closer inspection, consists of only a few cryptic bullet points. This example underscores the need for a well-articulated and in-depth succession plan. A clearly communicated strategy not only ensures that all participants understand their roles but also sets the stage for a smooth transition, safeguarding the business's future.

Assessing the Current State of Succession Plans

It's essential to evaluate the completeness and depth of your existing succession plan. If the plan lacks detail, it may be necessary to revisit and expand it to ensure it comprehensively covers all critical aspects of the business transition. Additionally, this is a crucial time to involve family members and key employees who are vital to the success of the plan.

Engaging Stakeholders in the Planning Process

One of the most significant challenges in business succession is ensuring that all potential successors are interested and prepared to lead the company forward. Engaging these key stakeholders early in discussions about the business transition is crucial. It is common to find that individuals previously identified as potential leaders may not be interested or ready to take on such roles, necessitating a reevaluation of the succession strategy.

Importance of a Process-Oriented Approach

The failure to communicate effectively with family members and other stakeholders is a significant barrier to successful business succession. Implementing a process-oriented approach, including comprehensive written plans for both the business and the family, is vital. These documents should cover management and ownership succession and might be accompanied by a business mission statement and a strategic plan, which together articulate the business's purpose and long-term goals.

How to Foster Effective Communication

To foster a collaborative environment, open, honest, and transparent communication must be prioritized. This may involve one-on-one dialogues and group meetings where roles within the family and the business can be openly discussed without conflating the two. In instances where communication challenges arise, the services of a communication coach or facilitator can be invaluable. These professionals help navigate emotional conversations, ensuring that all parties can express their views constructively.

The Path to Successful Succession

Through diligent collaboration and communication, business owners and their successors can develop realistic and achievable succession plans. This not only increases the likelihood of a successful transition but also safeguards the business from becoming another unfortunate statistic. Investing time and effort into these processes significantly enhances the prospects for a smooth continuation of the family business.