The ‘soft side’ of transition

CMA Partner, Dan Bean, M.A., M.B.A., recently published an article with Acropolis Investments titled, “The ‘Soft Side’ of Transition,” which looks at successful succession planning for family businesses.

Dan recommends following a staggered two-track process to ensure that the successor can lead and manage the business, before transferring voting control. Begin with leadership and management development, and then introduce the ownership transition. Dan suggests that most of the preparation for the transfer can be accomplished in five years.

Inc.com also includes planning ahead in their tips for a successful family succession:

The best family successions are preceded by years of planning. In addition to giving you time to craft a detailed succession strategy, advance planning allows you to prepare family members for their future roles in the company. It’s not uncommon for business owners to encourage their children to work in other companies or industries so they can gain well-rounded business experience before they take a leadership role in the company. Additionally, many family-run businesses will rotate future leaders through key operational roles in the company to prepare them for the day that they are actually in charge.  This process can also serve as a way to evaluate skills and performance, to determine what roles family members may be best suited to fill. [/note]

For additional tips from Inc.com, please see their original post here.

“The ‘Soft Side’ of Transition” outlines five key steps for the successful transfer of leadership. CMA will outline these steps in weekly blog posts starting next week with “Step 1: Identify and Develop a Successor.”