For most family business owners, an integral part of the succession planning process involves mentoring and providing the necessary ongoing support for the designated successor.
This support can take on many features and its benefits can be maximised when it begins early in the process. As soon as it is clear that the intention is to transfer the business, and the successor is both willing and capable, an owner can consider a wide variety of support and mentoring approaches. This article takes a look at some mentoring approaches that could be considered by family business owners.
Mentoring Approaches
In a family business the mentor-successor relationship is vitally important for the continuing success and growth of the business. Moreover, the benefits derived from this relationship are important for the continuing power and influence of the family over the business. To encourage their successors and maintain continued growth of the business, owners can utilise the following approaches to mentor their proteges:
- Spend time at the coal face working their way up to senior management and eventual leadership of the firm;
- Undertake tertiary studies or postgraduate qualifications such as an MBA, or to work in industry, even with a competitor. In Europe and the US, a unique mentoring system has been developed which encourages children of different family businesses to spend from 12 to 24 months working in another family enterprise. These businesses are usually in different industry sectors;
- Establishing a partnership with the next generation based on mutual responsibility, respect, and commitment;
- Recognising the importance and complexity of succession planning;
- Adopting a well-structured and systematic approach to countering any negative forces that might be at work to undermine the successor.
Importance of Interpersonal Relationships
The family business is a living asset. Whilst its ownership can be left to one’s heirs without their active participation, the management of the business cannot. If the business is to survive, the best person must be prepared to carry it on and be capable of doing so. Succession must be developed, nurtured and installed in a considered way.
In the end, mentoring and succession planning is about the personal and interpersonal aspects of designating a successor, communicating the decision, and mentoring and developing a successor rather than a strict focus on economic, financial, business, legal and estate matters such as the drafting of wills.
This article has been extracted and adapted from Smyrnios, K., Romano, C., & Dana, L. (2000). Family Business Succession Planning: A 10-Step Guide. Kew, Victoria: Centre for Professional Development.