Passing the baton (without it hitting the ground)…

Successfully passing the baton to the next generation is a goal for many family business leaders. It can also be one of the most challenging goals to achieve.

Not surprisingly, as in most things, failing to plan is planning to fail.

Most of us will have seen instances of a “family” CEO passing the baton to the next generation of the family with the new CEO, and the business more broadly, unprepared for the step up. The knock-on effects include key non-family staff becoming disaffected and leaving the business, resulting in a loss of IP, a downturn in trading performance, negative impacts on culture and, in more extreme cases, a loss of confidence in the business by lenders and suppliers.

Planning for succession to a NextGen CEO should be years in the making, and has to include key non-family staff being brought to the table and included in the process if they are to remain engaged.

I have seen terrific examples of this being done well, to the benefit of the owners, the new CEO, and those staff. 

For baby boomer CEOs, as we all know, the clock is ticking. But are we, as their advisors, proactively playing our part in encouraging them to start the planning process now?