Figuring Out the Best Order for Your Family Succession

There are many blogs on my website that discuss the way some family enterprises transition from one generation of leadership to the next, and most of them refer to the fact that this transition is typically from “autocratic” to “democratic” in nature.

This week I want to look a bit more into detail around the steps that a family might want to take to accomplish such a transition in a smooth way.

With a hat tip to a colleague in one of the study groups I’m in, once again, (thanks DT) this is a concept that struck me right away as “blog-worthy”.

How to Go from One Leader to Two

“Dave” was talking about a family where Dad was preparing two of his offspring to eventually take over his business, and it seems that Dad was thinking about the transition as a future event that would take place.

In Dad’s mind, I’m surmising, he would finish work one Friday as the head of the company and on the following Monday morning his two rising generation family members would walk in and be co-leaders of the business and succeed him.

This isn’t altogether surprising to learn, because so many business leaders imagine things in this way, which looks at a transition like this as an event, or a transfer, or a transaction.

But when transitions like this are done well, they are handled more as a process, not a singular event.

A Transition Implies an Overlap Period

So if we’re considering a transition process, that implies a period of time during which there’s shared leadership, and this leadership can and should be divided among the members of both generations.

As Dad considers which of his responsibilities he needs to begin to give up first, he can consult his two partners and together they can decide which of the successors is best suited to pick up which of these new tasks.

Some time later, when he’s ready to back away from another area that he’s been handling, they can reconvene, and maybe this one will be better suited for the other incoming leader.

Finding Peaceful Co-Existence

The idea I’m trying to get across here is that all of the family members can learn what a peaceful co-existence needs to look like.

As Dave put it, instead of going from 1 leader to 2 leaders, why not go from 1 leader to 3 leaders, and then when Dad is ready to fully exit the scene, then they can go to 2.

Admittedly, going from 1 to 2 sounds simpler, but it’s definitely not easier to pull off.

Sometimes, the best way to go from 1 to 2 is actually to pass through 3 on the way. This would be one of those times.

And, recognizing what’s required to work with a goal of peaceful co-existence is the main part of my argument.

Proving That Democracy Works

I always try to imaging a scenario that might play out, where Dad is now out of the picture and the siblings run into a conflict and they immediately throw their hands up and say that they can’t work together, because this is a situation where a one-person leadership model is required.

If, however, they could look back at the period during which they were functioning as a 3-person leadership team, they’d likely approach things differently.

They would have practised the skills necessary to co-create their decisions.

But if they’d gone straight from 1 leader to 2, then they’d be set up for a tug-of-war from the start.

The Actual Numbers Aren’t Important

I hope you recognize that the numbers aren’t what’s important here, but the concept.

You might be going from 2 leaders (say Mom and Dad) to 3, with three offspring planning to take over. In that case, the numbers might be from 2 to 5 to 3. The key is the overlap and getting used to the peaceful co-existence part.

The other key learning here is that a transition is not an event, it’s a process, and that process has stages.

Picture a relay race, and notice that the baton isn’t instantaneously thrown from one runner to the next, but handed off, which includes a period of time during which both runners are holding it.

Please don’t neglect that period, because it’s probably the key to a successful transition