Member Resource Series #1
The process of
generational transition—also called “succession”or the “continuity process”—is
the single most-talked-about issue in the area of family enterprise today.
Business family members often delay addressing this complex challenge because
of the type of conversations and decisions that need to take place with the future
generation. Advisors want to help business families develop a plan but are
equally apprehensive about broaching the topic of personal family relationships
and associated dynamics with their clients.
However,
conversations about interpersonal dynamics and generational transition are
necessary for the family to secure its best chance of long-term success. In
order to provide some helpful and effective ways for advisors to successfully
broach these conversations, IFEA spoke to several renowned family enterprise experts
and gained some insight from their experience. Among them, several key attributes
on the part of advisors repeatedly came up, including the relevance of active
listening; the ability to identify a client’s (or family’s) readiness; the
ability to resist the urge to provide immediate solutions; and to provide and
maintain sensitive, ongoing guidance throughout a transition.
As much as it is the duty and
responsibility of family enterprise advisors to initiate and guide these early
discussions, it is also recommended they act multilaterally and
collaboratively, with the best interest of the family at top of mind at all
times. This is a philosophy that if adopted can deepen the trust and respect
between family enterprise advisors and their business family clients. It is
this foundation that the following recommendations are presented, and deemed
relevant to designated family enterprise advisors from all disciplines, no
matter their area of expertise.
Continuity planning, or
succession, is not a one-size-fits-all solution, and in order for it to be
successful, it undoubtedly involves several advising professionals with
different areas of (potentially overlapping) expertise to support the family
system through a transition process, not an event. It is the inherent nature of
family enterprise advising that makes it multi-disciplinary, complex and at
times, challenging and humbling for a professional of any background.