Common Errors in Choosing a Successor

Following errors must be avoided in choosing a family business successor:

• Many business owners don’t give a serious thought to the succession planning. Due to the pressure on their time, they put off the things which are not urgent. Due to this, they just don’t attend to it and ignore the need for choosing a successor well in advance. This leaves a lot of confusion and uncertainty when the founder is gone suddenly.
• Choosing a successor is a challenge and a disturbing one if there are more than one probable candidates. To avoid a conflict arising out of the selection process, the founders sometimes put it under the carpet and delay the process. Finally it becomes too late and the inevitable happens. The confusion takes its toll on the business which crumbles under the weight of the conflict among the probable successors.
• Some founders follow the practice of handing over the reins of the business to the eldest of the children. This does not work always. Unless the successor is really capable to shoulder the responsibility, the choice backfires. The damage is done and it sinks the ship of the business.
• In some cases, there is no suitable candidate within the family who possesses the necessary skill, attitude and experience to be the right successor. So, the founder chooses the best among the available, but that ‘best’ proves to be the ‘worst’ for the business due to his inadequacy.
• In some cases, the successor just lacks the vision, passion or the interest in the business. In both the cases, final outcome results in the sickness or untimely death of the business.
• Sometimes, when a successor is chosen, there is a silent revolt or reaction among the others who are left out. They stop taking interest in the business and focus their energy on finding faults of the selected candidate, causing stress to the business owner(s) and a serious harm to the business.
• Occasionally, to satisfy competing egos and ambitions of more than one siblings or cousins, no one person is given the full authority to take and implement the final business decisions. A group, committee or board is formed which takes the final call. Here, for every major decision, consent is required from every person in that group. This slows down decision making and confuses many things.
• Sometimes, the succession planning is not properly formalized in a written, formal document, but is shared verbally with some family members. This becomes an issue of contention and dispute, if some misunderstanding among the family members crops up later.

(Expert advice to GROW your business wherever you are, whenever you want.

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