While I was working as a consultant for FOX, the topic of leadership succession was often on my mind—particularly whenever I was working with a multi-generational family to facilitate the process for the family’s leadership transition.

So for those of you thinking about leadership succession, here are five things to know before embarking on the journey:

1) Knowing that succession is an ongoing process, and not an event, will help the family – Most families are going through some sort of transition at any given time, be it in the family business, the family foundation, the family council, the family office, or another key component of the enterprise. The level of attention it is given and the timings vary, but successful transitions do not happen overnight—they are facilitated through a thoughtful and intentional planning process, often facilitated by the family office leader or an outside consultant.

2) Creating a structure that supports transitions will save you money and time – Operating agreements, family constitutions, foundation bylaws and business governance rules all are tools you can use to document the succession process before you reach the point where you actually need it. Knowing the rules in advance—whether it is the definition of who can be a leader, how to get rid of a leader, or the description of leader responsibilities—will ensure consistency and avoid hastily making up the process as you go along.

3) Communicating your plan to the broader family group will reduce anxiety – Leaders who give their family adequate time to process the change, along with a concrete plan for how it will occur, will find their way to a smoother transition and reduce anxiety. By targeting a date years in advance and then putting together a plan that will get you there, family members can avoid being overwhelmed and uncertain when the inevitable change in leadership takes place.

When Does a Family Become a Family Enterprise? Read more >>

4) Defining the types of leaders you need will ensure the future of the enterprise – The culture of the family can have a big impact on the types of leaders that will be successful. Whether your family values a collaborative mindset or independent thinking, a finance degree or street smarts, knowing what will work will be critical in your ability to identify and prepare potential future leaders.

5) Developing future leaders before you need them will ensure your leaders are adequately prepared – The number one concern of multi-generational families is preparing the next generation for the responsibilities of ownership. In much the same way, families must prepare future leaders for the responsibilities inherent in leading the components of the family enterprise, from the family council to the family business. Several families I know are working with their 20-somethings to ensure they get the critical financial education and business experience they will need in order to take on leadership roles within the family in the future.

I welcome your comments on how your family has prepared for succession.

---

Discover 10 Strategies for Family Unity>>