From ancient times, it has been the practice in India for the eldest son to take over the mantle. In the epics and Puranas, numerous instances of legacy getting priority over skills, talents and ethics have been described. However, these examples have continued over time and show a very accurate picture of the succession situation in India for family-run businesses. Family Business Succession Planning is a crucial aspect of all family-run businesses and the role of a family business advisor is monumental. Faulty transition plans lead to the destruction of dominant enterprises. Successional transition is crucial for a family business to survive. Hence, many factors affect succession. There are a few methods that can help make the development a natural process in Indian family businesses.
Family Business Succession Planning – Start Early
Foresight is always a promoting factor of success. Planning an early succession reduces the impact of the anticipation of unexpected questions. Firstly, it will give the family enough time to make reasonable decisions. Their opinions would be less biased and more accurate. It will allow all of the members involved in the family business of different generations to grow into their new roles slowly. Such a plan will also gain the trust and approval of the customers and their peers. They would watch the successors take on responsibilities and learn and have the assurance of their predecessors the whole time.
Encourage Inter-Generational Teamwork
Firstly, in most generational transition cases, familial rivalries often cause troubles. Therefore, it harms the business. So, it is essential to develop inter-generational teamwork with the family business concept. The older generation must become a coach or mentor to the succeeding generation. Family business leaders should put aside all grievances. They should resolve all tensions during this process so that when the succession finally happens, there are no emotional hindrances to the success of the enterprise.
Develop a Written Family Business Succession Planning
Writing the succession plan down is an excellent way of formally acknowledging it. The family legal advisors will make the plan clearer and also reduce any doubts or misunderstandings that may arise. This written plan should be comprehensive. Family business advisors should deal with everything starting from the skills and work experience required to how and when the decision of the succession will be made.
Involve the Family and Colleagues
Once the succession plan is drafted, Family business leaders, should appoint a group of chosen members to monitor the program and ensure its implementation. This group can consist of business colleagues, friends, and well-wishers of the family along with senior family members. Industry leaders whom the family trusts can also be part of this committee. It eliminates doubts and fears and provides invaluable sources of expertise.
Establishing a Training Process for Family Business Succession Planning
It is crucial to provide the upcoming generation with adequate training and skill management to ensure successful and satisfying careers with the guidance of an expert skill enhancement committee. This committee should be tasked with the responsibility of training and grooming.
Plan for Retirement
The owners need to prepare themselves mentally, emotionally and financially for a life that does not revolve around the business. The owners and founders can take up new roles and positions at the office as advisors. A family business advisor will help them to phase out of their influential role in the business slowly. This can also allow them to enter the new phase of their life healthily.
Make Retirement Timely and Unequivocal
Owners often have a problem accepting and dealing with retirement. It causes a multitude of problems. Owners need to step down from power when they are still fully capable. This way, they can oversee the working and management of their successor and guide them in an advisory capacity. They must remain in sync with their successors. It could be a difficult decision to make in the family business concept. Thus, it is advisable to seek professional advice from reputed family enterprise advisors and have open discussions about this and then make a proper wise decision. Many family business advisors are experts in retirement counselling and guidance.