It's fast approaching - that time when you pass your business onto another generation of the family. This is what you've planned for from the day you first set up your business.
So, the next generation - who are they? Are they capable of taking over the reins? Do they even want to? While you may have planned for another family member to succeed you, do you actually have someone to fit the bill?
Naturally you could sell the business or hire a new Chief Executive. Perhaps most challenging, however, is the situation where you have a willing successor who is just not yet ready to take up the top job.
In this situation a temporary manager from outside the family could be brought in to bridge the transition gap between the founder and the next generation. The outside executive can act as coach and mentor and assist in the development of other members of the management team, both family and non-family.
This training and mentoring can be vital. Far too often family businesses do not survive through to the second or third generation because the successor does not have the necessary skills or the interest and enthusiasm to do the job properly.
Most often the problem lies in a lack of planning. A 1998 survey suggests New Zealand businesses do not pay nearly enough attention to succession planning. Results of the survey ("A survey of Family and Private Businesses in New Zealand, 1998" - by Peter Evans) showed only 17.3% of businesses had a written succession plan in place.
Be prepared to let go of the reins
However, bear in mind that bringing in someone else to run your business, and possibly groom your successor, is not always easy. Once you've decided to go down this route, you will have to accept this person is likely to do things differently. Just because you have done something the same way for years should not mean they need to continue with it. They bring to the job their own skills, fresh ideas and, potentially, current thinking, which can be a positive way forward for the Company.
You will need to develop some ground rules, including a detailed job description for the new executive. Then get out of the way and let the person get on with the job of managing the business. Do not confuse the scene by having two CEO's running the business. Draw up a set of rules, agree on a monitoring system and then leave them to take over the reins.
If you are planning to still have some involvement in the business, you need to define your role before the new person comes on board.
# How much time will you spend in the business?
# What is your role to be? Perhaps you will still be involved in strategic planning in a non-executive capacity, but attend Board meetings and review management reports.
A successful transition is unlikely if you, as the principal, are still involved on a day-to-day basis.
Plan to avoid disaster
Unless there is proper planning and forethought, the employment of an outside executive into a family business could be a disaster. Define the duties and the responsibilities. Then select the person and, prior to the start date, agree on your expectations of the position and what your ongoing role will be.
Make sure you do not forget the team. This will be a big change, especially for other family members who may not be happy about someone else taking over what they may have considered their role. You need to prepare everyone for this new phase of the business and make the handover of responsibility very public and very clear that this person is now in charge.
The transition process can take time, so don't expect miracles overnight. But if properly planned and implemented accordingly, you should be in for a smooth ride.