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Wednesday, January 5, 2011

Your child is your business successor - how's that working out?

Despite all of your careful preparations and efforts, it's possible that the son or daughter you've selected as the successor of your business is not going to work out after all. Perhaps the person is less motivated than he or she should be, doesn't seem to be able to catch on to how things are done, has lost interest, or perhaps you are simply not satisfied with his or her effort or attitude.

It's essential that you have ways of assessing and monitoring your successor's progress that amount to more than "just a feeling that things won't work out", particularly if your successor disagrees with your assessment. Some ideas to achieve that include:

  • Spend some time talking about exactly what each of you wants out of the business relationship.
  • Make sure you are both clear on how long his or her training period will last.
  • Set out goals and time lines.
  • Agree on how progress is to be measured.
  • Agree on how your successor will get feedback and from whom the feedback will be obtained (for example, are you the only person assessing your successor's progress or will there be someone else involved as well, such as a senior manager?)

The idea is to make sure that both of you know exactly what is expected to happen and when it is supposed to happen. This will give your successor the best possible chance of being successful. Though it may seem overly formal if your successor is a family member, you need to learn to treat him or her in a businesslike manner. You're about to invest a lot of time, money and effort in him or her, and you are much more likely to get a good result if the process is documented, clearly understood and professional.

During your intial conversations, let your successor know what will happen if he or she is unable or unwilling to achieve the success you both expect. Is this person going to be the next owner of the business no matter what, or is it possible that if he or she doesn't fit in well with the business that you'll look elsewhere for a successor? How long will you take to decide that? Be straightforward.

Also agree on how long your successor will have to try out working for you before he or she decides that running your business is not what he or she wants to do. That way, neither of you is stringing the other along unnecessarily when things aren't going to work out as hoped.

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