For the new generation waiting to take over the reins of management, the time lapse can seem intolerable. And more often than not they wonder if it’s all worthwhile.
The challenges of balancing the desire to step up and prove oneself against the backdrop of family obligations, respect for parents, and peer pressure to succeed can push relationships to the edge. Add into the mix the frustration of seeing so many things they believe can be done better not being addressed and you have a recipe for disaster.
And these are generally issues that aren’t – and often can’t be – addressed.
The exiting generation holds the keys to the business and pushes back with expressions the likes of ‘You don’t have enough experience’, ‘I’m not ready yet’ and ‘You think I’m too old and useless’. The younger generation can see this as a form of emotional blackmail but really they are a reflection of the exiting generation not being ready for succession, and not knowing how to address the very complex issues that it can entail.
Almost all younger generations are seen as impatient and inexperienced. And all older generations are often categorised as out of touch and not willing to move on. These feelings are not new. But if the concerns of the younger generation are not addressed effectively it can easily lead to conflicts and lost opportunities for all concerned. And if the concerns of the older generations are also not addressed, it will result in a stalled or failed process.
The answer lies in effective succession planning and action. The goal of succession is the compounding of wealth across generations, the key words being ‘compounding’ and ‘across generations’.
This requires both generations working together. It must lead to certainty for both generations around timing and specific actions to be taken.
It also requires individual growth and a sense of contribution to achieve family harmony, which is the key ingredient for a successful transition. The incoming generation must be given the opportunity to contribute to the success of the business and feel a real sense of ownership and individual growth. If they can’t achieve this they will not be able to gain the experience necessary to take over the business.
The outgoing generation must find a sense of contribution in equipping the new generation to step up. It is their legacy, which will contribute to the future success of the business. And they must find where their continuing individual growth will come from as they step away from the business.
This is a partnership between the two generations to allow for a supported entry and exit in which both generations must compromise and encourage each other.
Active Knowledge Questions:
- Have you developed a succession plan that has clear timings and actions?
- Does it allow the new generation to step up, learn and participate?
- Does it provide for the exiting generation to step away in a respectful manner that provides a future for them?
- Will it lead to the compounding of wealth across generations supporting individual growth, contribution, and family harmony?
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All the best in the success of your business,
Richard Shrapnel
