Tag Archives: family business

Succession Planning in Family Business (redux)


father daughterI haven’t written about succession planning in family-owned businesses in a while, but the topic continues to interest me. (It was a significant issue in the novel I wrote, Playing the Game.) When should a company founder select a family member as the next CEO and when should the founder look outside the family?

The first piece of advice is not to leave this issue until the founder is in poor health or ready to retire immediately. Any succession plan requires time to implement, and the more time the better.

If family members are interested in the business, then they should be groomed—without making any promises—to acquire the skills and experience necessary to run the company. This may require a rotation through several departments in the business, each lasting at least two to three years. It may even require the heir-apparent getting experience outside the company, either in the same industry or another industry, to broaden his or her skills. In other words, it can take most of a career to prepare the successor to become the next CEO.

It’s also important to keep your options open. Don’t just groom one successor. Find two or three, both family members and non-family members. Having options helps everyone know that the business is being cared for and that the person selected will be fit for the job.

Open communications are critical throughout the entire process. The founder, the potential successors, and other stakeholders (both inside and outside the family) should be able to say at any point, “This isn’t working,” or to outline problems that have developed.

Also, it is best if there are trusted non-family members involved in the assessment as well. An advisor such as an attorney or CPA or executive coach who works with the business regularly can provide input on the strengths and weaknesses of the potential successor that mom or dad may not see clearly.

For more information on issues to consider, see

“5 tips for smooth ownership transitions for family businesses,” by Arne Boudewyn, The Business Journals, Feb 28, 2017

“How Do You Fire a Family Member?” by Gabrielle Pickard-Whitehea, Small Business Trends, Apr 29, 2017

“Succession Planning in a Family Business,” The Wall Street Journal, May 9, 2017

“Is nepotism in the workplace ever appropriate?” by Stan Silverman, The Business Journals, Dec 5, 2017

For other posts I’ve written on succession planning, click here.

When have you had to deal with a difficult succession planning issue, in a family-owned business or otherwise?

Leave a comment

Filed under Leadership, Management

Tips for Succession Planning in a Family Business


business teamI wrote about the topic of succession planning a few months ago, but I continue to find the topic fascinating. Succession planning in any size business is critical, and when family dynamics enter the picture, the risks are greater. After all, the wrong decision can doom not only the business, but also Thanksgiving dinner.

So how should a family business go about determining the founder’s successor?

The first thing to do is to start early. Unless there is a single perfect candidate with ideal background, it will take a few years to ready someone for the CEO role. It’s important to be objective about who the best candidate is—it might not be the oldest son. It might be a younger daughter. It might be a cousin. It might even be someone outside the family.

While the existing CEO in a family business may make the ultimate decision, he or she should get input from others. That input should come from other leaders in the business, both family members and leaders outside the family. And family members who don’t work at the company but who rely on the business for their livelihoods should also be consulted. Input from key customers and other stakeholders is also important. Given the family dynamics involved, it might be important to use an outside consultant or advisor to gather the input.

Family dynamics will be critical in determining the right candidate. Are there sibling rivalries that will resurface? What education and other experiences do various candidates have? Has one person been given the inside track, which might have left gaps in other candidates’ backgrounds? Should those gaps be filled to give more candidates a decent shot at the leadership role?

It is best not to put all your eggs in one basket. Grooming just one candidate for the CEO position might leave you with no one. That is true in any business, but more likely to be true where the bias is to keep the role in the family, meaning there are fewer candidates to begin with. The expected successor may decide to join a monastery or to go live in the Caribbean. Or the successor might die or become disabled. Have a back-up plan.

org chartBy starting well in advance of the need for a successor, it is possible to develop two or three viable candidates and to rotate them through various roles to give them all an opportunity to build the experience and relationships they will need in the role.

And if one or more potential successors is not developing as expected, it is important to have an honest onversation sooner rather than later. It won’t be an easy conversation, but the family member can save face by exiting the company or opting for a sidelined position on his or her terms and timing. That way, he or she is not obviously passed over when the time for succession arrives.

Here are a few excellent articles on managing succession planning in family-owned businesses:

How to Save the Family Business, a 1994 article by Peter Drucker, reprintedi n the Wall Street Journal, September 30, 2015. 

7 ‘Empire’ Lessons On Family Business Succession, by Andrea King Collier, Forbes, April 27, 2015

Leadership Lessons from Great Family Businesses, Claudio Fernández-AráozSonny IqbalJörg Ritter, Harvard Business Review April 2015

How to improve the chances your family business will succeed in the next generation, by Steve Coleman, The Business Journals, Apr 1, 2015

When have you seen succession planning work well?

Leave a comment

Filed under Uncategorized

Good Career Advice For a Family-Owned Business (Or Any Business)


fordAs I have mentioned before, I am writing a novel about a family-owned business, in which succession planning for the CEO becomes important. So I was interested in the recent Wall Street Journal article on the Ford family’s involvement into the fifth generation in Ford Motor Company. See Henry Ford’s Great-Great Grandchildren Join the Family Business, by Mike Ramsey, published in the Wall Street Journal on June 26, 2013

There are advantages to having the founder’s family involved in the management of the company. Ford Chairman Bill Ford, Jr., is quoted as saying

“[Shareholders] know there is going to be someone there through thick and thin who isn’t going to take a golden parachute and run somewhere.”

I was impressed that the current generation of Ford family members are subject to the same hiring process that every other employee is. The article discussed Calvin Ford, who is now a zone sales manager for Ford. But he held jobs outside of Ford first.

Businessmen Lunching TogetherAlso, Bill Ford, Jr., remembers his father, William Clay Ford, Sr., telling him

“Join the company only if you love it, and don’t expect to make it to the top.”

That is good career advice for anyone. A career lasts a long time, and will take many twists and turns. No one should go into a job not loving the work and the company they work for. And no one – even a founder’s child – should have any expectations of a next position or ending role.

Just do the job you’re hired to do to the best of your abilities. And prepare yourself to take on more responsibility, whatever seems most needed in the business and most suited to your skills.

What is the best career advice you ever received?

5 Comments

Filed under Leadership, Management, Workplace, Writing