We recommend that you read Part 1 & Part 2 of this article first, if it skipped your attention.
To access the article,
Family Business Succession Challenge (Part 1)
Have you wondered what it takes to create a dream? Did you see any family business that lasts 16 generations and are having diverse individuals sitting across the dinning table with multigenerational presence?
Family Business Succession Challenge (Part 2)
Succession is more than just passing the baton. First and foremost, succession must not be considered an act of passing the baton to the next generation. This is hideously wrong and a killer of all hopes.
For part 2 related emails and feedback we received, I am humbled and yet overly concerned with the current state of the Indian family business. I cannot thank the owners enough for reaching out to us with their open-hearted views and blessings to help us serve our purpose of helping them.
Courtesy to those who wrote, called, met and shared their experiences and desire. Their desire to move forward with a well-designed objective yet sentimentally aligned approach has helped us gather a lot of current pulse for the state of affairs on this crucial topic of succession planning.
Part 3 of the article is all owing to these owners who showed might, gut and care for doing the right thing at the right time in the right way. Honouring you all and thanking all other readers, below is the article for further contemplation and deliberation with yourself and your loved ones.
This article focuses on the most significant issues families face – so much so that despite knowing how succession planning should be done, they failed in the worst way — by never starting it at all !
How come? Why so? Why such suffering and losing legacy to lethargy or fear or ego or call whatever but why fail? Or not succeed but merely hug the struggle to survive?
To give you some ideas which I am sure will resonate with all chambers of your beating heart or at least it would be something not too foreign to your feelings.
First and foremost, a few of the biggest reasons succession planning is not done despite knowing what must be done for successful succession, bringing generations of joy & prosperity, is — fear of losing false ego or fear of battling with someone with power & ego or it isn’t about fear of losing love. To most people in Indian family businesses, sadly, love is not needed as much as safe havens for the flow of income and amass of assets, estates and cash they are sitting at or eyeing at.
Some wise family businesses that successfully implemented succession planning show a favourable disposition of mind.
In a simple sense wise, such family businesses have the following understanding and acceptances:
(1) They understand that understanding something isn’t enough, but to act in a planned, structured, objective and yet sentimentally safe way is vital
(2) They don’t have two faces but hold one singular face of their institutional identity. They take pride and summon grit in living with integrity as per their institutional sense.
(3) They are darn honest and help other members to gain the courage to hold & live honestly in the family or be in business.
(4) They understand well that what they speak doesn’t matter genuinely but what each member of every generation feels in their four chambers of the heart is destiny deciding. Hence, they create mechanisms and systems to allow the voices of family members to be heard, pondered, appreciated and resolved with great respect and encouragement.
(5) They understand that succession isn’t about which brother’s son we choose as heir for the family enterprise. But, its the son’s merit, skills, capabilities, intentions and character, indeed, such decisions are based. From an early stage of child development, these families only engage kids in the uniquely devised path for their growth as individuals and future leaders. They focus from an early age only on the differentiator of emotional maturity of the next generation, emotional intelligence of the next generation, merits of successive generations and similar factors that empirically prove who is the rightest fit for the ambition of family enterprise.
(6) They understand that succession is myopic if only it is about electing the heir. Still, more so the entire next generation who will pull business for another three decades— for this, they acknowledge and admit that the running generation must engage in the education of their head & heart along with making formal arrangements to make next generation have together hold custom-designed education to give the process of succession a solid foundation.
(7)They understand the importance of suspending egos and enabling truth and accountability to flow in every member’s decision-making mind & judgment-making heart. For this, the stewards and owners trust the institutional sense driven by the family constitution and governance.
They use these two to guide their multi-year development, plan and commitment for next-generation succession to create a guaranteed prosperous and unity with love in the family for decades to come.
(8) They understand that it is not too hard to understand all the above, especially when comparing the real long-term pain of remaining in the grip of false & fearful egoistic beliefs, losing the sweetest time, which is simply irrecoverable, and losing family members’ morals, love and faith even bit by bit until nothing left.
They hence are super aggressive in making all right movements at the right time for institutionalising entire family ownership and enterprise through a family constitution that is legally and morally agreed!
Or at least morally agreed to live because each individual of the family ownership & next generation mindfully decides to logically and emotionally live on them as a sure bet to win long odds for very long terms.
They arrived during the making of the constitution at a common ground of the importance of living the constitution they all created in the process. They believed in this making that they all would thrive and dwell in prosperity with love in abundance.
Usually, most family business owners decide to create and participate in making every chapter of the constitution. This helps every owner and next generation make buy-in relatively quickly and with pride beyond words for their loved ones.
…many more essential acceptances of mature and healthy family businesses owners & members.
The 12-36 months of succession planning depends on how long the family has practised living daily on their constitution and family governance. In cases where a constitution and governance is not present, succession planning may take longer than just 12 months.
I hope this gives you another level of clarity should you seek answers on guaranteeing multigenerational success.