Succession planning means making the preparations necessary to ensure harmony of the family and the continuity of the enterprise through the next generation. When we look at succession planning in a family business, e should look at these 2 aspects:
Transition of family business ownership: this relates to the transfer of shares or business ownership to the next generation.
Transition of leadership: A successful leadership transfer is essential for the company. The younger generation must assume leadership roles and learn how to manage a company successfully. They must show these key stakeholders, as well as their parents, that they are capable of managing the company successfully.
But family businesses face various obstacles in devising a succession plan, which can be :
Lack of appreciation and recognition among family members from different generations.
Resistance from founders/incumbents to give up control.
Considering difference of opinion, thoughts and approach as a liability rather than asset.
Poor expression of feelings and wants.
A family business should overcome these obstacles and strive to devise detailed and well thought succession plan in order to facilitate a smooth transition from one generation to another which does not hamper the business position as well as the family dynamic.
REFERENCES:
Lansberg, I. (1988). The succession conspiracy. Family Business Review, 1(2), 119–143
Hubler, T., 1999. Ten most prevalent obstacles to family-business succession planning. Family Business Review, 12(2), pp.117-121.