fqmily rness Achieve success rn successron

By Mark T. Green

A NY number of ll,problemssome obvious, some not so apparent-can prevent smooth transitions from one generation of family business ownership to the next. Though there are infinite possible trouble spots, we can boil them down to two primary ailments of succession: poor communication and lack of planning. Poor communication is arguably the biggest culprit. It takes many forms, but as succession involves many of life's unpleasant conversation topics (death and money, for example), it also requires wrestling with such chareed issues as power, control and-perhaps the most unsettling for all of uschange. Add emotional relatives and assorted family dynamics to the mix and you invite communication break- downs.

A family business that discusses these issues straight on, with open and honest communication, can do a better job with succession. If both the controlling generation and the succeeding generation participate in open dialogue and discuss their ideas about the future, the path should be smoother.

To improve communication, a family business must have a system in place to provide an open forum for discussion of sensitive or tough issues. One of the best ways to do this is to develop a governance structure that fits the needs of the business and the family in business. For the business, a family needs a board of directors or other governing board that addresses the issues of the business.

Like any business organization, the family needs a governance structure to guide it, such as family meetings or councils, to chart a course for the concerns of the family. How formal such a structure should be is up to the family to decide, but the governance structure should be the forum to discuss even the most contentious issues openly and honestly. Having this infrastructure in place does not guarantee success, but it can greatly improve and

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Even the clearest communication can't make up for a lack of planning for succession. The dictionary defines succession as "the sequence of people or things in order, one after another." You can either plan for succession or have it happen to you. Succession is going to occur whether you like it or not, so why not take control and tackle it head-on? Ironically, some of the most control-oriented leaders of family businesses (usually the founders) are often the ones who must relinquish control to secure the future of the business they created. The leader's failure to play the end game often is his or her lasting legacy to the family and the business. Often, these founders see the succession process as a threat to their power, while in truth, succession only solidifies their longterm influence.

With good succession planning, we must tackle all the dark issues that we don't like to talk about-money, power, control, change and taxes-to better the chances of our company lasting long into the future. This means spending time, money and energy up front to save spending more time, money and energy later-with greater risk and emotional cost to the family and the business.

Remember that a plan is not a plan unless it is in writing. Too often, family businesses fail to put things on paper; instead, much of the planning process is retained in a key person's head. If that key person is not around, then neither is the plan.

When should you start? Yesterday! Succession should be on the radar screen of every company from day one. The future of any company is on the line, and without careful consideration of its greatest asset, its human capital, the firm is in jeopardy. Since the future is uncertain and unpredictable, it is only prudent to plan for the "what ifs?," especially to keep them from becoming "what nows?"

- Dr. Green is an associctte of The Famil" Business Consulting Croup Inc., Mariertct, Ga.; (800) 551-0633. Reprinted with permission.from The Family Business Advisor, a copyrighted publication of Family Enterprise Publishers. No portion of this article may be reproduced without pe rmis s ion of F amily Ent e r p ri s e Publishers.

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