A dear friend and business partner recently lost his vibrant and highly efficient wife. With no signs of ill health beforehand, she suffered traumatic heart failure and was gone in an instant.
It was a hammer blow, but a month later and still grieving deeply, the wheels of life for him and his children are moving forward as before. It’s thanks to the preparations they made to deal with succession in the family.
READ Why estate planning is essential to minimising family strife
I know it’s morbid, but it’s a question we all need to ask ourselves. How well will your family and business successors cope after your death? Will your wife and children be able to handle the immediate tasks of winding up your estate?
Will they be capable of handling the household and family tasks you previously managed and speedily get on with their lives? Succession plans don’t relieve grief, but they make it easier for life to carry on as before.
The same questions apply, perhaps even more so, with regard to organisations in which you are involved. If you’re part of a business that bears responsibility for the livelihoods of people, it’s vital that you have a personal succession plan in place.
In a family business it’s crucial that preparation has been made to fill the gap created by your demise. Drawing up a succession plan in a family business is an emotional task, but if not done, levels of emotion and risk of conflict are far greater.
We will all die one day from the incurable disease of ‘mortality’. While I understand young, healthy persons thinking they will live forever, it never ceases to amaze me when ageing business owners, directors and managers take no steps to prepare for the day when they will no longer be around.
It’s irresponsible. Preparing a succession plan is not rocket science. It’s a well-documented practice, with many skilled consultants available to assist.
If you’re the head of a family, a business manager, director or owner, and don’t already have one in place, here are some of the jobs you should tackle immediately.
READ Why some family members avoid succession planning
As a family member
Prepare a ‘dead file’. This will include all the personal information required to wind up your estate.
A copy of your will, ID documents, marriage certificate, insurance policies, firearm licences, bank account details, tax certificate, proof of ownership of assets, and passwords or pin codes to access your computer, phone and bank accounts should be included in the file.
There should also be a list with the names and contact details of all persons you have dealt with in connection with these matters.
As a manager
Identify a person, preferably a colleague or subordinate in the same business, who can take your place if you were to be gone in an instant.
It may be inappropriate to make your choice widely known, but those close to you need to know who you have in mind.
Prepare the person for your job. Expose him or her to experiences that will facilitate a smooth transition, including formal training to fill their knowledge or skill gaps, attendance at relevant industry functions, and appropriate local or international travel by nominating them to stand in for you.
As a business owner
Implementing succession that maintains family harmony and puts the business in the best hands (ownership and management) is the toughest test and challenge that family businesses face.
Start planning early. The sooner everyone in the family understands they are part of a complex web of business ownership and management, the better.
Family members need to understand the difference between family issues and business issues, and keep them separated.
Set up a formal family forum. This is not an option, it’s essential, and its first job is to draw up a family constitution.
There are many models available for the content of such a constitution. Select one that covers all the key elements and, if necessary, appoint a professional facilitator to help you finalise it.
A critical part of this constitution is the succession plan. While ageing leaders obviously need to plan to replace themselves, senior managers of any age should have a plan to fill the gap should they unexpectedly no longer be around.
It was Myles Munroe, evangelist and minister, who said: “True leaders don’t invest in buildings. They invest in people. Because success without a successor is failure.”
Peter Hughes is a business and management consultant.
