Plan a Smooth Succession for Your Family Business

A central concern of family business leaders is assessing the readiness of the next generation to take over the business. This is critical, because research shows that 25% of failed transitions occur due to a lack of a prepared heir. Taking time to co-design what readiness looks like enables both parties to align and have confidence in their ability to step into leadership roles. Families must bolster the participation of the next generation by giving them more autonomy, embedding high-trust behaviors, and adhering to clear standards of readiness. When done effectively, succession plans provide a pathway for future stability and ease the transition of next generation leaders. Engaging the next generation in business transition planning promotes greater alignment, collaboration, and perhaps most importantly, trust in each other and a shared vision for the future.

In many family businesses, the tension between the eagerness of the next generation’s leaders…

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This article was written by Amy Castoro and originally published on hbr.org