Mar 16, 2015

2015-03-15 THE SUCCESSION PLAN

I was wondering how a family business live on~! these are some titles that i found:

5 Ways To Perpetuate The Family Business
Avoid the Traps That Can Destroy Family Businesses
How One Family Business Is Solving the Succession Problem
Managing the Family Business: It Takes a Village



Some quotes:

Many successful family business leaders tell me that they spend half of their time working to address family and ownership issues and to maintain unity. If the business leader tries to control too much of the power in the system, he or she will often weaken and destroy it.-hbswk.hbs.edu
Seems like the power in the system is an issue here and it also indicates that unity might resolve the problem.
Not much that have caught my eyes and then i see this:

According to Nancy Bowman-Upton in the Small Business Administration publication Transferring Management in the Family-Owned Business, it is estimated that less than 33% of family businesses survive the transition from first generation ownership to second generation ownership. Sometimes this is due to the family not having interest in running the business, but in most cases it is due to the lack of creating a plan. A succession plan is absolutely necessary to ensure the business lives on from generation to generation. - familybusiness.about.com
it shows some simple tips on family business. rather general information since each business is different and they should have their own specific approach.

succession plan
thought it is simple planning of deciding who should do what etc
realized that there is more to it. i.e. no only who should do what also there could be distinction between "family" and "non-family" member during the decision making;

In my personal real life case, that's not really the main focus. The greater importance is who is the key person and would the successor be able to continue to be functioning as the key person? Another concern is the team that you used to work with, would they listen to the command of the successor. Last but not least it also relates to the personal interest of the "successor", is this what he/ she are interested in or he/she is passionate about other career path.

A system take some time to be built and it could naturally being molded into its shape. It would take some time and trials. A plan/strategy is needed to be devised and the priority is to make sure it is a sustainable pass on of the family business.

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