Getting Mum & Dad To Talk About Succession Planning

Have you tried to raise the subject of succession planning with your parents? How have they reacted? I am assuming from the fact you are reading this that it may not have had the result that you wanted. In this article, Russ Haworth provides food for thought and some ideas as to how to bring up the conversation around succession and getting Mum and Dad to talk about it.

It may be that you have been met with some resistance to the idea, there are more important things to be worrying about than that. Is it the proverbial tin can that keeps getting kicked down the road? If so, read on.

If you are one of the family businesses that have a well thought out and living succession plan in place, that’s awesome. If you would like to leave your own thoughts on how you have achieved that, I am sure those without would benefit from your experience.

There are a number of ways in which you can try and get Mum and Dad to the table and different approaches will work for different people. As with anything related to family business, there is no best practice, no ‘off the shelf’ solution or silver bullet for this.

However, I have summarised below some of my thoughts on what I have observed with the families that I have worked with and helped through the facilitation these discussions.

Do You Know How Your Parents Feel?

If you are someone who is looking to take on a leadership, management or ownership role in your family business, the prospect might be scary and exciting in equal measure, it may symbolise to you a progression that you have dreamed about for a long time. But do you know how your parents feel about it?

Succession in a family business can evoke differing emotions depending on which generation you are in. If you are the rising generation, looking to take on a more senior management role, or stepping into a leadership role or taking on the ownership of the business you are likely to feel very different to those in the senior generation.

For them it can be like asking them to give up a limb, their role in the business is part of who they are as a person, part of their identity. The leadership role they have helps them to feel accomplished and able to fulfil their purpose. The ownership is reward for their years of blood, sweat and tears in something that may even have been around longer than you have.

So, whilst you may feel impatient, excited and eager to start these discussions, I would suggest the first step would be to try and understand what they are feeling about it.

This is not easy, it is a discussion that invites us to talk about our fears, our emotions and it can be uncomfortable to do so. That often makes it easy to avoid, but each day that passes is another day closer to when the issue may be forced upon you by circumstance rather than choice and that in itself can lead to challenges.

It may be easier for your parents to talk to someone who is not linked to the business, either someone who is trained and able to explore these issues with them, or someone they know who may have been through something similar.

Understand What Might Be HEARD When You Say Succession

In addition, be clear about what it is you are wanting to talk about. When you mention succession, is it clear what it is that you are trying to discuss? After all, it is a word that has a pretty broad definition. Dictionary.com defines it as:

The coming of one person or thing after another in order, sequence, or in the course of events, or the right, act, or process, by which one person succeeds to the office, rank, estate, or the like, of another or the descent or transmission of a throne, dignity, estate, or the like.

If you are talking about succession in terms of you taking on a management or leadership role (i.e. rank), is that clear or could your parents be hearing it as the succession to their estate?

If they are hearing in that context, they may well be seeing that as you telling them that they are ready for the knackers yard, which may be a source of resistance. The phrase itself presents the idea of one thing ending and another beginning.

All of the elements of succession will need to be dealt with, but some may be easier to tackle than others. For example, your parents may feel more comfortable discussing you moving into a leadership role, than you taking over the ownership of the business.

If this is the case, start there.

This may be the catalyst that leads to other discussions, remember this isn’t something that has to be done in one sitting. Succession Planning is a process, not an event. Presenting it a a process rather than an event may also help as very often it is perceived as an event.

Let’s take the example of a change in ownership, to ‘complete’ a change in ownership there may need to be formal legal documents that need to be signed and invariably the signing of these documents can feel very much like an event. If this is how succession planning is seen, it can seem final and there will be a lack of motivation.

If we look at a changing of roles in the business, there may be a specific date in mind for when you take over the Managing Director role from Mum or Dad, again this can feel like an event.

Each of these events, however, are ideally the result of a carefully and sensitively managed process, that has explored all of the hopes, dreams, fears and concerns of all those involved. Starting the discussions around this is not the same as the event that makes any changes formal, but it can feel like that.

Appreciating their views and showing empathy for how they may be feeling about it is a great way to encourage this as a collaborative process, rather than them feeling forced out of something they love and get great joy from (despite the tough days!).

Emotion Trumps Logic

Let’s face it, we all know that dealing with succession is going to happen at some point, be that through planning or in the event of the incumbent owner passing away or suffering an illness without a plan.

Your parents know that too.

I think most of us would agree that dealing with it via a planning process with the active participation of all, towards a common goal, is probably better than waiting to see what their Will says (if indeed there is one).

So Why Is It So Hard To Start The Planning Process?

We are emotional creatures, and whilst logic may dictate that we should have these plans in place, our thoughts and feelings put barriers and excuses in the way.

This is also why many people don’t have a valid Will in place. They think that this means they are going to die. The two are not linked, however, dying with a Will in place is usually far better than dying without one.

The planning process should bring peace of mind, if carried out well it will address all of the concerns of all those involved and so could be re-framed as a positive rather than a negative emotional experience. That is not to say that it is all sunshine and flowers, there will be difficult discussions, there may be some bumps in the road but with the right facilitation and attitude from all it can be far more rewarding than perhaps it is perceived.

The Impact Of COVID-19

We cannot ignore the fact that we are living through a global pandemic at the moment. We are being faced with our own mortality and a hugely uncertain economic environment. Understand they might be scared, it may be really hard for them to admit that they are scared, but it doesn’t mean they aren’t.

They may be scared about giving up control of something that has been a part of their lives for a very long time, especially at a difficult time.

They may be scared for the future of the business and that passing that responsibility to you at the moment is not setting you up for success.

They may simply be scared that you are not the right person or that there is never going to be the right person to take on their roles in the business.

They may be scared about losing their identity. Imagine the feeling of going from Janet or John, Managing Director of XYZ Limited to ’just’ Janet or John. This can feel like a loss, and with any loss there is the need to go through a process of accepting that loss. Some are better than others at it, but acknowledging it is the first step in helping to overcome it.

As well as a loss of identity in the business, it may also feel like a loss of identity in the family itself.

If the process of succession planning is focused solely on the technical issues of ownership and control, there is a real danger that emotional aspects are being ‘buried’ and not discussed. I have seen the consequences of this. There are families who have spent a lot of time and money creating a legal or financial structure that looks great on paper, but when it comes to signing it, they have not been able to because it ‘doesn’t feel right’.

Ignoring the elephant in the room does not mean that there isn’t an elephant in the room! Taking the analogy a step further, if there are issues around trust, loss of identity, loss of a sense of purpose and other emotional aspects to overcome, it can seem like a pretty big elephant. This may be the case, but the best way to eat an elephant (metaphorically of course!) is one bite at a time.

Right, enough about elephants!

The point here is that technical solutions are often needed to facilitate a succession plan, and these are based on logic, not emotion. It is often the emotional aspects of succession that need to be addressed before, or at least alongside, coming up with the technical solution.

Is There Ever A ‘Right’ Time?

I often hear that it just isn’t the right time to start succession planning and so it is something that is put aside until there is a right time.

There is a Chinese proverb that states; “The best time to plant a tree was 20 years ago, the next best time is now” and for me, this rings true for the discussions around succession planning. That said you may well be met with the response “Is this really the right time?”

What may be happening is that there are other underlying reasons as to why the discussions aren’t happening, but it is easier to say “now is not the time” rather than voice the real concern.

It may be that there isn’t a sufficient level of trust that you are the right person to take the business on? Do you have the right skills? Do you have ideas that they are resistant to? Do you want to diversify the business and they want to maintain the status quo? What if you are more successful than them?

It is likely that you will need to have honest and open discussions about these difficult scenarios. That may feel like volunteering to stub your toe! Why would you want to have those difficult discussions? Why would you want to hear or tell someone that you don’t feel that they are the right person for the job?

It may be that you or whoever the successor is does not possess the right skills etc. but understanding that and being honest about that is the first step in overcoming that barrier.

There are courses you can go on, qualifications you can get, mentors you can find to help overcome all of these, but understanding the issue exists is the first stage in addressing it.

Preparing For Life Outside Of The Family Business

People are living longer and more vibrant lives and so the concept of retirement can be really unattractive. Who wants to give up an active role in a thriving business with lots of interaction with people on a day to day basis to go and sit around doing nothing all day?

Re-framing retirement as simply the next phase in their life can again help to start the discussions. Retirement can be a vibrant time, an active time where they can achieve the balance between their passions of work, the business and other interests as part of the process of handing over the responsibility

There are lots of programmes, courses and literature available to help the next generation to prepare for life within the family business, but there is not so much available to those senior generation who are preparing for life outside the family business.

Are they financially independent of the business? Do they know what this looks like? Have they spoken to somebody about this?

Again, the financial dependency on the business can often be an excuse rather than a reason and there are ways to explore this to ensure that your parents feel financially able to reduce their dependency on the business.

Emotional independence is harder and takes time but given that this is a process, that’s OK.

One exercise that your parents could look at it to list out all of the positive emotions and feelings they have that are as a direct result of their role within the business. What emotional well-being does the business provide them with?

By understanding this, you can explore how those positive emotions could be maintained outside of the business.

Are there ways in which their purpose and identity can be maintained or even enhanced beyond their current role?

Exploring their purpose and meaning beyond the business can be really exciting for them and open up opportunities that they may not have considered before, such as becoming a mentor to young entrepreneurs through a mentoring programme or college/university.

Are there non-executive directorships that they could take on to help other businesses?

Do they want to embark on a project to write or record the history of the family business? This could be an incredibly inspiring piece of work that can be cherished by generations to come.

Succession Is A Process, Not An Event

I have mentioned a few times that succession is a process and not an event. This however, is based on an assumption that some planning is done.

It becomes an event as and when people either pass away or suffer a debilitating illness and at that point the process is typically driven by the legal system. This can lead to increased levels of stress and conflict in the family at a time when there is likely to be a lot of emotion around any way.

So perhaps it could be reworded as, succession should be a process not an event but that is dependent on all those involved!

None of us are immortal, none of us are immune to emotion and not all of us find it easy to talk about how we are feeling.

There is help available though. Using a facilitator who is working for the family as a whole, rather than for an individual or for the business entity, can be hugely valuable in these circumstances. They will be used to having these discussions, used to hearing the fears and concerns and will be empathetic towards those feeling them.

They are able to give everyone in the process a voice and create an environment that helps people feel heard and to explore their options.

This will typically lead to far more meaningful discussions when it comes to the financial and technical matters that will need to be put in place to deliver a succession plan.