“Our most basic common link is we all cherish our children’s future” - John F. Kennedy
One of the big issues I face when engaging with a family business is the role of the incumbent (often Mum or Dad) and the thorny issue of organisational changes to facilitate succession. The process of succession can be long and difficult, not least for the person who is passing the baton over to a son or daughter. The process is emotional and raises questions (often unspoken) such as “Are they the right person for the job?”, “Will they wreck what it has taken me years to build?” or “Do I really want to retire?” Sometimes that last question is a real clincher because it raises the really challenging subject of “what next?”.
“What next” is the topic which often seems to really impact incumbents as it involves serious amounts of change; significant personal change for certain but also change to the business that they have worked long and hard to grow and nurture. The process of succession can require significant organisational change to make it work.
This was made all too apparent to me when dealing with a client recently, where the father (let’s call him Charles) was retiring and passing the Managing Director role over to his son (let’s call him James). Thankfully, Charles had bought into the concept that succession is not an event but a process and so had set a date for his “retirement” in three years’ time. What was abundantly clear to me upon meeting both Charles and James was how different they were.
Charles was blunt, direct and assertive whereas James was more democratic, collegiate and team-oriented. Neither style struck me as more appropriate than the other but the structure and culture of the company had been evolved to cater for Charles; what Charles might call a Power Culture. James’ leadership style would need to change to fit the culture or vice versa. When I broached the subject of organisational change Charles bristled, taking it as a direct criticism of his leadership style. He told me in no uncertain terms that he had built his business from nothing and his style had made that possible. James would just have to learn to be more assertive and more like him! The consultant’s credo of speaking truth to power is never more appropriate than at times like this.
I explained to Charles that the succession process involves a great deal of change and that this was normal in any business. As companies grow so roles, structures and responsibilities evolve to cater for new challenges. This succession was just another challenge, albeit one with more consequence than many others. James was keen to take on the mantle and to lead the company but privately he had revealed his worry about how people would accept him in that role and how uncomfortable he was with being direct. He felt unwilling to challenge Charles on what the structure should look like and would likely have eventually succeeded to the role using a leadership style which he felt uncomfortable with; in other words, trying be Charles. In the long term, he may well have made this work but I suspected that this would be a difficult transition; more difficult than it needed to be. Charles felt that James just needed to learn to be more assertive and that he would “grow into it”.
I spent a lot of time with James over the next few weeks helping him to visualise how he saw the MD role after Charles had retired and what changes he would need to make. Gradually we worked on potential structures and he identified key personnel that he felt would support him to make the role work. Eventually he felt confident enough to talk to Charles about his concerns. The clincher was when he told Charles that he now realised that he wasn’t like him and didn’t need to be to be successful; what he needed was for Charles and the other staff to recognise this. It was a lightbulb moment for Charles; this wasn’t a criticism of him or his style but rather an acceptance that James was not him; not better or worse, just different. From that moment on James and Charles had a common purpose to make the succession work for both of them with Charles doing his best to ease the transition rather than seeing it as a direct challenge.
The succession process requires change:
- Be prepared to accept that the person you choose to be successor may not have the same personality or characteristics as you do. This does not make them less able than you are, just different.
- Different personalities can require different organisational structures to function effectively as a leader. Flat structures can work well for direct and assertive individuals (especially in smaller firms) but this can be a lonely structure for more democratic, less assertive leadership styles who prefer support and a strong team. Structural changes will not take place over night, hence why succession is a processnot an event.
- Remember that, as the incumbent leader, how you react to change will set the mood for the whole company. The change will be hard for all and it will be emotional; other employees need to be able to see how things will work under your successor.
- As incumbent, involve your successor in the process rather than make all the decisions for them. You may think you know best at this moment but you want to make the succession process as seamless as you can and help them to discover their own leadership style.