Letting Go to Move Forward
In our work with family businesses we often hear the next generation lament that the current generation in charge will never “let go.” The next generation is keenly aware that if the current generation cannot “let go,” then they, the next generation, cannot move “forward.” Our advice to the next generation is that unless the current generation initiates and supports succession, the process will be unsuccessful.
There are many possible reasons why the current generation cannot let go – some are valid reasons and others are grounded in the emotional connection to the business and uncertainty about their next chapter in life.
A survey of family business CEO’s titled Laird Norton Tyee Family Business Survey concluded that only 25% of current generation CEOs were confident that the next generation was capable of taking over the business. Furthermore, it found that 93% of the current generation’s wealth and income was tied up on the balance sheet and P & L of the family business.
Therefore, notwithstanding emotional implications of transitioning the business, if those in the current generation have little confidence (founded or unfounded) in the next generation AND the majority of their financial stability is tied to the business, it will be nearly impossible for them to let go.
So what can the next generation do to foster an environment which encourages the current generation to embrace the succession process despite the inherent challenges? What often needs to occur is a shift from negative attitudes that discourage succession, to positive ones which support succession.
The chart below shows negative attitudes on the left and positive attitudes on the right.
Next Generation Strategies to Support Succession
As a next generation family member in the business, take an honest assessment of yourself. How might you be hindering a successful succession process by exhibiting negative attitudes? Or supporting the process by being positive? Shift the negative attitudes to positive ones and the current generation will be more likely to embrace a successful succession process so that you, the next generation, can move “forward.”