Addressing feelings as well as practicalities

Everyone involved in the succession process for a family business will have feelings about the plan and, if not addressed, they can get in the way, says Russ Haworth of Family Business Partnership.

“From the perspective of the senior generation, if they’ve worked in the business for a long time, it is very likely their role forms part of their identity or sense of purpose, their reason for getting up in the morning. If you feel you’re being asked to give that up, you’re obviously going to be resistant.

“One of the things I ask when I’m working with senior generations is 'what can you do with your time that gives you the same satisfaction'? For some, that is mentoring or providing support. Or it can be in a new role as chair of the family business, keeping the benefit of their experience, but passing on day-to-day management to the next generation.

“Retaining that purpose and a sense of identity makes it a smoother transition.”

Talk through potential problems

Lack of trust can also be a problem. “It may be the senior generation don’t believe those coming after them are well prepared or as hungry as they need to be. That’s subjective rather than factual, but this lack of trust creates resistance unless it’s overcome.

“Coupled with that is a fear of failure. What happens if I pass this on and they don’t do as well as I’ve done, or in some cases do better? If your sense of identity and purpose is linked to your role in the business and someone comes along and does it better, it can be as hard as not having a role in the business at all.”

There may also be fears from the next generation about taking on the business with modern day challenges their parents didn’t face. “If you’re open and honest about those feelings, and put them on the table either directly or through facilitated discussions, they can be overcome.”

Succession is complex because it is multi-layered, Russ says, and this may be even more so for farming families where there is a long history and sense of identity tied up with the business. As ever, talking openly and appreciating everybody involved will bring in different perspectives, which is important, Russ concludes. “Understanding that helps oil the wheels of the communication needed to create an effective plan.”

About Russ Haworth

Russ Haworth ACFBA is a specialist family business adviser. Based in Taunton, Somerset, he works with family businesses all over the world. Alongside his consultancy work, he also hosts the Family Business Podcast.