Succession is a journey. And there are many dangers that the traveller must be wary of and keep a close eye out for. Not only must they avoid these dangers but be proactive in protecting against them.
Active Knowledge Question:
What risks do you believe family business succession inherently carries with it?
There are 12 critical dangers that must be proactively avoided in succession. Firstly, you must be aware of them; secondly, you should avoid them if possible; and thirdly you must know how to actively defeat them. These dangers exist across all the five lands of succession and will impact not only the prospect of succession ever occurring but also the levels of harmony, conflict, business success and wealth growth across generations.
The dangers are:
1. LOST – A FOREST:
The traveller has not sought advice from an experienced guide and has lost their way.
2. DARKNESS – IS A PATH TO NOWHERE:
The traveller has failed to act quickly enough and has been left behind while everyone else has begun their journey to the summit.
3. GLACIER – ICY RELATIONSHIPS:
Family members are not communicating with each other and are not participating in the succession journey.
4. BOTTOMLESS PIT:
The separation between family and business is weak, governance structures have not been established, and there is a danger of the business and family falling into the bottomless pit.
5. VOLCANO – FIERY RELATIONSHIPS AND CONFLICT:
Family harmony has not been achieved, and conflict has erupted within the family.
6. LOST SHIP:
The future leadership team has not been developed and is unable to steer the ship.
7. EMPTY – TREASURE CHEST:
The traveller has failed to plan and prepare early enough and has not built sufficient financial resources to support the growing family and business.
8. GREED AND ENVY – A MONSTER:
Family members are envious of the positions others have achieved, and personal interests/greed is overrunning the family.
Existing management is unable to surrender past practices and cannot embrace new ways.
10. BARREN LAKE:
The future of the business is uncertain.
11. MERRY GO ROUND:
Indecision rules the camp and the succession journey has faltered.
12. FALLING OFF THE CLIFF:
At the final ascent (the execution of the succession plan), focus and endurance are not sufficient to deliver on the final plan.
Over the next few weeks, we will explore each of the dangers and how to proactively guard against them.
An entirely new level of performance.
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All the best in the success of your business,