Leadership transitions in family businesses are potentially tumultuous events.
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Minimizing the turmoil is difficult, but it can be done – primarily by carefully planning the way you announce the change to the organization's customers and stakeholders.
There is no formula capable of defining an effective announcement strategy for every family business. The way you announce a change of leadership in your business will largely depend on your specific circumstances and the personalities of the people in the company. Even so, several characteristics should inform the strategy you ultimately implement.
Initiate a Family Discussion
In a family business, leadership transitions have the most dramatic effect on the family itself. Family members need to be given advance notice of your intentions and should never be subjected to a surprise announcement in a press release.
In fact, the best approach is to engage the entire family in the discussion early in the process so that questions and concerns can be aired in a private forum rather than a public one.
The goal in any leadership transition should be to maintain stability and consistency throughout the process. This can't happen if the announcement is sprung on employees and customers at the last minute.
An announcement about a planned transition should be announced at least six months or a year before the transition occurs. When possible it's beneficial to give even more notice, either through a formal announcement or through informal discussions with the current leader. Ideally, no one should be surprised when you make a formal announcement of your intentions.
Express Confidence & Provide Rationale
When you announce your successor, it's important to express your confidence in their abilities clearly and often. No one is going to buy the idea that your son or daughter is equipped to run the business simply because they share your genes.
Instead, they need to understand the reasons why you believe your successor is qualified to fill your shoes. Build the case for your decision by citing your successor's experience and previous successes within the organization. If your successor is new to the business, announce early and state your intention to mentor them into the role.
Define Your Role
It's not enough to announce that a successor will be taking over the top leadership position in the organization. You also have to define what your role will be after the transition occurs, especially if you are the first generation leader. Will you continue to play a role in the business, or are you planning to step away completely? Either way, your employees and customers need to know your plans in order to successfully process the transition to a new leader.
Set a Date
The most important part of announcing a transition in a family business is to set a date. If no date is announced, everyone involved will be frustrated by the weight of a looming transition that can seemingly occur at any time. Eliminate the anxiety by being decisive and establishing a firm date as soon as the transition is announced.