Unfortunately, the majority of family business leaders do not engage in the process of business succession planning. Even if they do engage in it, they might not do it properly or they wait until it’s too late to achieve maximum impact.
The average longevity of a CEO in a non-family business is six years, but CEOs in family-owned businesses usually stay for 20 to 25 years. What follows are several tips for succession planning. It’s important to remember that succession planning can occur at numerous levels throughout the organization and it is important to think at least about the top 5 to 8 positions to put into your written succession plan. Keep these points in mind.
- Think outside of seniority
- Use a professional process of regular performance assessment, skill evaluations, and reviews of career history
- Rank possible successors based on key criteria like learning agility, past work experience, past performance ratings, the ability to take risks, decision-making ability, prior leadership positions, education and problem-solving ability.
- Prepare the next generation with comprehensive planning
- Consider a leader outside of the family
Although this process can be difficult for any family business, it can be made much easier by consulting with a New Jersey business succession planning attorney.