RECENT SDL NEWS
Succession Planning for Family-Owned Business Must First Address Family Dynamics
Business issues come secondary, says Strategic Designs for Learning
DENVER – OCTOBER 22, 2008 – Planning for successors in family-owned businesses often ignores an important caveat—deal with family issues first, advises Strategic Designs for Learning (SDL).
Too frequently, management consultants working with family companies create plans that focus on business issues. Yet first addressing family dynamics is key to developing a successful succession plan, according to Renée Montoya Lado, founder of SDL, family business consultants and coaches.
“Succession is one of the biggest issues with family businesses and frequently where things can fall apart,” said Lado, SDL’s founder and family-business expert. “Selecting a successor often predicts future profitability. Yet the succession plan, and even the business’ future, can be derailed when family expectations and concerns about future leadership are not addressed.
While more than 30 percent of all family-owned businesses survive into the second generation, only 12 percent make it to the third. A mere 3 percent survive into the fourth generation and beyond. Succeeding generations of leadership plays a big role, Lado explained.
All companies are more likely to succeed when there are shared values, goals and vision. Unresolved family relationships can complicate the best business strategies. Successful succession plans differentiate between leadership and ownership, often a sticking point for family members. Other important succession planning steps involve carefully unearthing expectations of which family member or family groups may assume control; helping address past grievances that can upset the proposed succession and creating a feeling of ownership about the decision of who will assume control.
Using predictive assessments is a key strategy to create such shared agreement on succeeding leadership. Personality and cognitive assessments help individual family members understand their strongest areas for contribution. An eldest son might excel in sales, but may not have the aptitude or interest in the administrative decisions for the business. Helping him and other family members recognize their key strengths and interests can help clarify the best leader or leadership team to assume control.
Strategic Designs For Learning (SDL) assists organizations in assessing, aligning and developing talent. Specific capabilities include leadership development, executive coaching, team development, and succession - with particular expertise in working with family-owned businesses. SDL provides a unique integration of leadership assessment, organizational development, coaching expertise, and business knowledge to effectively bridge the gap between business strategy and organizational effectiveness. More information is available at www.strategicdesigns.net.
# # #
Media Contact: Renée Montoya Lado email@example.com