Succession is generally considered to be the biggest challenge for family businesses. A good succession plan ensures continuity, prevents internal conflict, and ensures long-term growth (Handler, 1994). Most family businesses, however, including ours, struggle to define a clear transition. Our company does not have an official succession plan in place at the moment, leaving space for ambiguity, competition, and uncertainty.
Visualize a three-lane highway. One of my siblings is in the fast lane, eager to take over. Another is cautiously cruising, unsure if she even want to be part of the ride. And then there's me, stuck at the intersection, wondering if I’m supposed to get in the car or be left standing on the sidewalk. The lack of a defined successor and clear roadmap creates underlying tensions, as each of us is left questioning our future roles. Without clarity, family firms are prone to power struggles, which undermine business performance (De Massis et al., 2008).
In spite of the uncertainty, I have plenty of respect for my parents' achievements. They began with a little business and turned it into a multinational corporation, demonstrating that family businesses are more than just making money; they are also about impact, identity and continuity. However, succession planning needs to be at the forefront if the story is to continue. Managing conflicts and striking a balance between personal goals and business needs can be accomplished with a systematic approach that includes staged position transitions, leadership decisions based on merit, and external advisory input (Chrisman et al., 2005).
The real question remains:
Should succession in family businesses be based purely on merit, or should legacy and family loyalty play a role?
References:
Chrisman, J.J., Chua, J.H. and Sharma, P. (2005) 'Trends and directions in the development of a strategic management theory of the family firm', Entrepreneurship Theory and Practice, 29(5), pp. 555-576.
De Massis, A., Chua, J.H. and Chrisman, J.J. (2008) 'Factors preventing intra-family succession', Family Business Review, 21(2), pp. 183-199.
Handler, W.C. (1994) 'Succession in family business: A review of the research', Family Business Review, 7(2), pp. 133-157.