Hopefully, your family business has chosen a great successor. But if you’re in the midst of training your successor — or even beginning to hand off the reins — and regretting your choice, how can you take a bad situation and turn it around? There are several options you might want to consider.
Bring in a family business consultant
Before you “fire” your chosen successor, discuss the matter with your board of directors and an objective party, such as a trusted advisor or a family business consultant. After all, it’s possible that your perception may be off the mark.
You may think, for instance, that your successor lacks the necessary skills to run your company. But, in reality, he or she may simply have a different leadership style than you do. Talking about the situation will help you determine what went awry — or if the successor actually is the right person after all.
Get to the bottom of the problem
If you believe that — with a little work — your successor is capable of running the business effectively, talk with him or her. Be clear about your concerns and outline what must change before he or she can take over. And don’t forget to solicit input from your successor. He or she may be aware of the problems and might even have started fixing them.
Also, make sure you discover why your successor is having difficulties. Perhaps he or she lacks formal training in a particular aspect of the job. In such cases, a community college course or even just more mentoring from you might solve the problem.
Or your successor may be facing personal issues that are getting in the way of work. For example, he or she may be going through tough times with a spouse or other loved one, battling an addiction, or facing financial problems. By listening, you can find out what the issues are, and you may be able to help your successor address them.
Know when it’s time for a change
After talking with your advisor and, perhaps, your chosen successor, you may still feel the successor needs to go — or even discover that he or she no longer wants to take over your family business. If you decide to choose someone else, let your successor know as soon as possible and explain why things won’t work. Being honest will help you keep personal ties intact.
As you resolve matters with your former successor, reconstruct the succession process to determine what promises you made and how you communicated them. Review memos and talk with your managers and your ex-successor to discover any areas you could have handled differently.
Additionally, if you haven’t done so already, develop objective criteria for your next successor. Once you pick a new leader, discuss what went wrong with your first choice and why your expectations changed.
To keep operations running smoothly and safeguard your family business, create an exit strategy and explain the situation to employees. The amount of information you share with your staff will depend in part on how much you’ve already communicated to them.
And finally, if your second choice also doesn’t work out, stay open to the possibility that the problem may not have been with your successors. It’s possible that you fell short of communicating important expectations or failed to spend enough time training your candidates.
Start a new chapter
Everyone makes mistakes. So, if you’ve made the mistake of choosing the wrong successor, learn from it and move forward. Just be certain that you work closely with your business advisors. Doing so will help you avoid making another mistake when choosing a new successor.
Tax returns, financial statements, IRS communications and similar items are vital to address and process, but they should not be the focal point. Think of these as tasks to get to the real work, which is providing you the information you need and an interchange of ideas to move you forward. The goal is to help you implement your strategies and vision. This is what we do!