Illustration by Dan Page
Inspired by true events.
There was once a successful, entrepreneurial migrant family...
Quite the journey
My father’s father was born Samuel Zwick in 1877 in Lithuania.
He founded an egg processing factory and became a highly successful businessman.
After he and his family emigrated to the UK between the wars, he started up again in the same industry.
He anglicised his surname to Wick, and called his new business S Z Wick & Sons; my late father Maurice being one of the three sons.
Over the years, the business expanded to three factories: Rogeston in Wales, Oldham in Lancashire, and Buenos Aires in Argentina, as well as a head office in London.
Samuel decided to open his next factory in China.
He travelled to Shanghai to do exactly that — and it was successful.
However, soon after the Japanese invaded Shanghai in 1937, they took over his factory and threw him in jail. They soon found they couldn’t run the factory without him, so he was released. He spent the rest of the war running the factory and thankfully survived.
Meanwhile, my father and uncles carried on running the other factories.
Unfortunately, they never sat down and agreed on a succession plan. Serious disagreements over money broke out between them all, resulting in eye-watering legal fees of many £m.
The acrimonious disputes caused an irreparable family split. When I was a child, I remember being told that it would be disloyal to make contact with certain parts of my own family.
Combining family, money and succession can be a risky business. And, even when the individuals aren’t family members, it’s often not plain sailing.
The truth can hurt
Many years ago I was asked to assist a 25 year old business with their succession planning. They said they wanted a professional, objective view.
At the time I worked with them they had nearly 300 people working across a head office and
eight retail stores.
I conducted a RealityCheck® process, part of which involves interviewing a cross-section of management and staff. One client described a RealityCheck® process as ‘like having an MRI scan for my business’.
My report did not go down well.
They decided to ignore what their business ‘MRI scan’ revealed with, as I later found out, dire consequences:
There were personal conflicts, rivalries, and disagreements over leadership roles and decision-making authorities.
They weren’t able to balance competence with the founder’s choices of who they hired. This is a common issue in SMEs.
When it came down to it, the founder resisted change. They didn’t want to let go of control or embrace new ideas, while the Senior Leadership Team (almost all next generation) could clearly see the need for change.
The founder wasn’t prepared to invest in training and development of their successors. This was crucial; the latter needed training, mentorship, and opportunities to gain necessary skills and experience.
Sadly, the company went through a very difficult period, a consequence of which has been that they have fallen behind their competitors, most of whom have modernised their stores and processes.
So, what does good succession planning look like?
Here’s what I believe a good succession plan for a business (whether family or not) consists of:
1. Early planning: Start the succession planning process early, allowing for ample time to identify potential successors, assess their readiness, and implement necessary development and training programmes.
2. Clear goals and objectives: Clearly define the goals and objectives of the succession plan. This includes determining the long-term vision for the business, the desired role of the retiring executives, and the criteria for selecting their successor(s).
3. Transparent communication: Open and transparent communication among management and staff is crucial. Discuss the succession plan, its rationale, and potential implications with all relevant parties to manage expectations and address concerns.
4. Identifying and developing successors: Identify and mentor potential successors, based on their qualifications, skills, and their commitment to the business. Provide them with opportunities for exposure to different parts of the business.
5. Gradual transition: Consider implementing a gradual transition period where the current owner(s) gradually transfer(s) responsibilities and decision-making authority to their successor(s). This allows for knowledge transfer and ensures a smoother transition.
6. Continuity of governance: Establish a clear governance structure that outlines the roles and responsibilities of the active shareholders, the board and appropriate staff. This helps maintain stability and continuity during the transition process.
7. Professional guidance: Seek professional advice from lawyers, accountants, and business consultants. They can provide valuable objective insights, help navigate legal and financial complexities, and ensure compliance with regulations.
8. Regular plan review: Regularly review and update the succession plan to account for changes in business dynamics, market conditions, and business goals. This ensures the plan remains relevant and adaptable over time.
Remember, every business is unique, and a well-crafted succession plan should be tailored to the specific needs, goals, and dynamics of the business.
Your business, like your family, needs to be nurtured with care and love.
As always, I’m here to support you. Contact me if you fancy a chat.
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