Typically, succession in family businesses involves the founder and the next gen finding a way in which they can work together to transition the business. It’s often a ‘bumpy ride’ and can lead to conflict and disharmony on the home front.
But spouses and partners can play a key role in the transition process.
Research reflects that spouses are often informal but key advisors to both the founder and members of the incoming team. In addition, their focus is drawn to ensuring:
- There exists clarity around the transition of management and then ownership, including its timing.
- There is equity between members of the next gen, including those that are not coming into the business.
- That family harmony is maintained.
Given their focus, the active involvement of spouses in succession is likely to underpin a lower conflict environment during and after the transition process. It is therefore important that they be actively engaged in the succession process and not sidelined.
In many instances, they are seen to and do play this role by being a ‘communicator’ between the new and exiting teams. They remove the emotion and confrontation that can sometimes exist between each team and allow each side to express any frustrations that are arising in the process.
It also important to recognise that spouses are often significant equity holders in the business and will be one of the parties transitioning ownership. Their voice and vote do count and just because they may have been a ‘silent’ equity holder most of their life, does not mean they will remain so during the succession process.
Spouses and partners can not only be a champion for harmony, equity and sensibility in the succession process, they can often back that up with voting power.
Active Knowledge Questions:
- What role does your spouse play in the succession process?
- Are you making the most of this valuable relationship in the transition process?
Act Now
Searching for the world’s best family business succession guide? Buy Transition – Orienteering The Five Lands of Succession.
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All the best in the success of your business,
Richard Shrapnel
