flevyblog

Flevy Blog is an online business magazine covering Business Strategies, Business Theories, & Business Stories.
MANAGEMENT & LEADERSHIP STRATEGY, MARKETING, SALES OPERATIONS & SUPPLY CHAIN ORGANIZATION & CHANGE IT/MIS Other

Following The 10 Steps to Effective Succession Planning

Effective Succession Planning in Family Business has been redefined in the 21st century.

The Family Business sector continues to be vibrant, successful, and ambitious. This, despite tough economic conditions and accelerating pace of change.  Family firms are vital to all economies.  It offers stability, a commitment for the long term, and a responsibility to their communities and employees.

However, despite the extraordinary longevity of individual family firms, the average life span across the sector is three generations.  Only very few get past four generations. Not surviving the transition to the next generation may be a sign of a Family Business not achieving their long-term ambitions.

What is Succession Planning

Succession Planning is the process of establishing goals and then mapping a path towards toward.  It includes traversing the landscape and avoiding the various challenges that succession presents. Companies encounter certain considerations.  They are faced with issues relating to retention of the intended successor, the possibility of jealousy by other employees, and how employees respond to the succession plan.

When addressing these concerns, it becomes essential that Family Business must create a disciplined succession process. When succession planning is undertaken, it improves chances for business continuity. As a famous saying goes, “Failing to plan means planning to fail.”

The 10 Steps to Effective Succession Planning

A well-managed succession process is a rallying point for family firms to reinvent itself and find new energy for growth.

Effective Succession into Leadership focuses on building up internal capabilities and strengths.

  1. Get experience outside the family firm. This brings a broad range of experience to the task of leadership that can be beneficial to the family firm.
  2. Develop a strategic plan for the medium term. In developing a strategic plan for the medium, it is essential that this is consulted with all the shareholders.
  3. Broaden the decision-making process.  Broadening the decision-making process includes making decisions collectively.
  4. Strengthen the role of the Board. This step enables the Board to have a key role in overseeing the succession process.
  5. Clarify what the retiring generation will do. Undertaking the fifth step ensures prevention or proper management of any misunderstanding that may arise.

Effective Succession into Ownership focuses on early preparation and full collaboration to achieve effective ownership transition.

  1. Start early. Family firms are encouraged to start the process as early as possible.
  2. Communicate, communicate, communicate. The second step to effective succession into ownership makes sure that everyone with a stake in the future has a say when it comes to the succession process and the transition of ownership.
  3. Do your homework. Succession planning may involve approaches that can cause difficulties depending on circumstances and jurisdiction. It is essential that family businesses do their homework.
  4. Invest in education. Investing in education is an essential part of succession. People running the business must have the right expertise.
  5. Diversify your wealth. The fifth step to effective succession into ownership focuses on building assets outside the family firm.

Members of Family Businesses must understand that an effective succession into ownership is not an end but must be viewed as the beginning. Hence, every step that is required in succession planning must be done with clear direction and purpose.  For, in the final analysis, succession planning creates lasting legacies for the business.  But this can only happen when it is done right.

Interested in gaining more understanding of the effective Succession Planning in Family Businesses? You can learn more and download an editable PowerPoint about Family Business: Effective Succession Planning here on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor the material for specific purposes helped us to make presentations, knowledge sharing, and toolkit development, which formed part of the overall program collateral. While FlevyPro contains resource material that any consultancy, project or delivery firm must have, it is an essential part of a small firm or independent consultant’s toolbox.”

– Michael Duff, Managing Director at Change Strategy (UK)

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

“Several times a month, I browse FlevyPro for presentations relevant to the job challenge I have (I am a consultant). When the subject requires it, I explore further and buy from the Flevy Marketplace. On all occasions, I read them, analyze them. I take the most relevant and applicable ideas for my work; and, of course, all this translates to my and my clients’ benefits.”

– Omar Hernán Montes Parra, CEO at Quantum SFE

About Joseph Robinson

Joseph Robinson is the Vice President of Strategy at Flevy. Flevy is the marketplace for best practices in business management. Learn how the Fortune 100 and global consulting firms do it. Improve the growth and efficiency of your organization by leveraging Flevy's library of best practice methodologies and templates. The documents at Flevy (https://flevy.com) are of the same caliber as those produced by top-tier management consulting firms, like McKinsey, BCG, Bain, and Accenture. Most were developed by seasoned executives and consultants with 20+ years of experience. Flevy covers 200+ management topics, ranging from Digital Transformation to Growth Strategy to Lean Management. You can peruse a full list of management topics available on Flevy here. Prior to Flevy, Joseph worked as an Associate at BCG and holds an MBA from the Sloan School of Management at MIT. You can connect with Joseph on LinkedIn here.

, , ,



Complimentary Business Training Guides


Many companies develop robust strategies, but struggle with operationalizing their strategies into implementable steps. This presentation from flevy introduces 12 powerful business frameworks spanning both Strategy Development and Strategy Execution. [Learn more]   This 48-page whitepaper, authored by consultancy Envisioning, provides the frameworks, tools, and insights needed to manage serious Change—under the backdrop of the business lifecycle. These lifecycle stages are each marked by distinct attributes, challenges, and behaviors. [Learn more]
We've developed a very comprehensive collection of Strategy & Transformation PowerPoint templates for you to use in your own business presentations, spanning topics from Growth Strategy to Brand Development to Innovation to Customer Experience to Strategic Management. [Learn more]   We have compiled a collection of 10 Lean Six Sigma templates (Excel) and Operational Excellence guides (PowerPoint) by a multitude of LSS experts. These tools cover topics including 8 Disciplines (8D), 5 Why's, 7 Wastes, Value Stream Mapping (VSM), and DMAIC. [Learn more]
Recent Articles by Corporate Function

  

  

  

  

  


The Flevy Business Blog (https://flevy.com/blog) is a leading source of information on business strategies, business theories, and business stories. Most articles have been contributed for management consultants and industry executives with over 20 years of experience. If you would like to contribute an article, please email our editor David Tang at [email protected].

Flevy (https://flevy.com) is the marketplace for premium business documents, such as management frameworks, presentation templates, and financial models. Our documents are of the same caliber produced by top tier consulting firms, like McKinsey, Bain, Accenture, BCG, and Deloitte. Learn more about Flevy here.


Connect with Flevy:

   
  


About Flevy.com   /   Terms   /   Privacy Policy
© 2021. Flevy LLC. All Rights Reserved.