There are numerous examples in family and founder-led businesses of the person at the top holding on to power for a long time, for too long in the eyes of neutral observers and way past retirement age. This holding on for too long is often a source of frustration for the next generation, as they spend years and years in a holding pattern – without substantial responsibility for the business and unfulfilled, but too committed to leave, playing Prince Charles to the leader’s Queen Elizabeth. Although this is a common state of affairs and has its roots in the psychology of the successful leader, it doesn’t have to be that way. For some leaders, succession is easy: a) because they have a clear idea of what they want to do outside of the business after leaving; and b) because they have confidence in a successor, selected and tested over a long period.
It is important not to wait for too long to start the process that prepares the leader for the next stage of his or her life and the business for the next stage of its existence. A leader who is already “overdue” is much harder to wean from the business than a leader who has started to think about separation when there was still time left for another life. There are no hard and fast rules for when is the right time, but beginning the discussion early makes it more likely that succession takes place more smoothly, as the departing leader and the organization have all the time required to get ready. It is not true that nobody likes to talk about their own succession, but it is true that talking about succession takes courage, both on the part of the departing leader and on the part of the person or people bringing up the topic. This is courage in governance, as opposed to courage in business, and leaders of family and founder-led businesses should look for this kind of courage in the people they select to serve on their boards.
Succession doesn’t have to be a struggle – the person at the top of a family or family-led business doesn’t have to stay on for too long. Many will stay on for too long, and not many will prepare to step down of their own accord, but most would be grateful if a timely departure could be arranged. It is up to board members and trusted advisors to help leaders see their way to an exit that is both personally satisfying and good for the business.