Does your business provide any type of succession planning? Are you preparing your next generation of employees to take over, even if in an "acting" role, if you never hire from within? If you do succession planning do you use any tools, such as what I found on Michigan state government website: https://www.michigan.gov/documents/mdcs/SuccessionPlanningCareerPipelineToolKit_213235_7.pdf Lastly how do you handle succession, especially when it is abrupt and unplanned?
Succession planning and succession planning tools
Answers
Thank you Wayne for asking because I too am working on succession planning for a rapidly growing family business whose SHs do not have another generation who wish to join that operation. We too are interested in what you may find!
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The shareholders may want to prepare for a sale having no future generations...
Having served in Family Offices and multi generational family businesses, the one thing I tell Heads of Families is that
This should all be encapsulated with what I call the Family Governance Document/Agreement which defines the role of the family (and it's members) in the decision making of the company (to include
NOT having a family member be the head of the corporation does NOT mean the family has to sell. I have seen outsiders step in while a qualified family member rises. LEGACY (family name or the business directly associated with the family) or the continuance of the business is much more important.
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Emerson,
You are correct that many a family business follows this path, as many a family business also cashes out.
It comes down to what is best for the shareholders, not the future generations, and unfortunately, not the company or its employees.
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Human Capital