Make sure your business is worth surviving succession
The intrinsic trouble with preparing for the future is that we don’t know what it will contain—this is the case when it comes to succession in family businesses just as it is in all things. It requires a flexible plan designed to ensure that the business survives no matter who might (or might not) be involved in up coming generation. The greatest bequest for a successor is not a plan tailored to them personally but one that ensures that the business will survive any transfer. As Stephen Drotter, co-founder and chairman of The Leadership Pipeline Institute and author of several books, including The Succession Pipeline, states “Family businesses should not fall into the trap of prioritizing job creation for their children. Instead, more emphasis needs to be placed on perpetuating the business.”
Family businesses are often run by one owner who has a comprehensive grasp of the workings of that business. This knowledge often isn’t effectively shared with current employees let alone future ones. Governance software can be an invaluable tool for ensuring a wide base of knowledge is efficiently distributed, as well as providing a clear indication of what level of awareness decision-makers hold. Does everyone read the annual report? Dividend notices? Do board members read minutes and news bulletins to remain up to date with company maneuvers? Are the relevant people attending the necessary events? These insights can help to identify gaps in information vital for informed decision-making as well as monitor user engagement and ensure a well informed, well planned succession transition one day in the future. With a mobile and tech-savvy generation in the running for succession, this concept is easier to engage than ever—so long as your technology keeps pace with their progress.
The next generation doesn’t want to learn antiquated processes which will hinder their creativity and flow, they want to work for companies that understand the importance of keeping up with the times and having everything they need to do their jobs at their finger tips. It’s key that insights and knowledge are adequately communicated and shared with the next generation. Sclerosis can build up knowingly or unknowingly, and the right governance software and expertise can prevent this.
If we apply Drotter’s theory that the best business to pass off is one that’s working well right now and at the same time consider the ever-changing environments of businesses today it becomes clear that the “now” business needs to be forward thinking and future facing to make way for the smooth succession transition of tomorrow.
If you’re interested in learning more about Trusted Family, and its secure governance platform, feel free to schedule a call with us!
