Blog

There comes a time in most Family Businesses when it’s time for the ‘founding’ members to let go, step aside and hand over the reins or baton!  

Letting go is a subject of conversation, raised often, particularly when there are problems with the 'changing of the guard'!  

This situation, handing over the reins, despite good intentions, often becomes complex and complicated when the ‘founder’ holds on too tightly or for too long. Simply said, they have trouble letting go! 

This raises the question ‘why is that so?’ 

Loss of Identity: Erosion of identity, rather than management, is often the root cause. Stepping away can be a huge change for the owner who has often given their life to building the company. It has been their primary purpose. Succession can feel more like an existential crisis rather than a professional milestone. These feelings should be considered and taken seriously. Seek professional health guidance if needed. 

No post-retirement plan: Yes, there has been talk of taking it easy, going on a cruise or catching up with old friends, but without meaningful activities and engagement, founders tend to linger on at the Business. A retirement plan plans for retirement. Being proactive, finding ways, purpose, and making other investments to fill their time. 

Distrust in the next Generation: Founders fear their successors will dismantle existing Business activities. But without trust, delegation and early succession planning, holding on to power creates tension and disharmony. This can fester to a point where potential incumbents become disillusioned, lose interest and abandon the Business entirely. 

7 Sound Tips for Making Letting Go a Smooth Transition 

1. Early Succession Planning – can't be overstated or overrated. The transition process takes time if it is to be smoothly and successfully developed and executed. Seek professional advice, including exploring tax and other implications of handing over.  

2. Develop Potential Talent – support, train and develop members for future leadership roles. To encourage competence, commitment and interest, acknowledge that leadership should be earned, that it is not by right or entitlement. Focus on and select promotions based on merit. 

3. Communication is key – open, honest and transparent communication is essential in all aspects of Business operations from day one. No member in the Business should feel left out, isolated or overwhelmed. This is the foundation for building trust, unity and connection, sharing the family’s vision, values and goals for Business success, now and longer term. This philosophy underpins successful succession planning.   

4. Define your Role - Going forward, establish boundaries for you and your successor. Respect their authority. Overstepping or attempting to keep control can damage and strain relationships and hinder the Business.   

5. Stage the Handover – phase in handover, easing out of daily operations gradually, consulting, and sharing decision-making before handing over key strategic or financial veto and controls. Mentoring, support and guidance may be valuable but should offered without interfering. 

6. Engage a Professional Advisor – consult a Business advisor or impartial third party for advice and guidance if needed.  This neutral forum is an opportunity to raise any concerns and address any fears about hesitation to step away.  

7. Plan your Future – start planning and preparing for the next stage of your life. Just as you have put time, energy and passion into your Business, explore what this new world can offer. Letting go, retirement isn’t the end of your story, or journey; it is the beginning of a new chapter. Page 1 begins?