If you are the founder of a successful company, you are likely to have built up power and control in your company for over 20 years, with everyone around you relying on your decisions. For an entrepreneur, having power means having a sense of control, choice and the ability to influence, and it is a natural and healthy instinct to use this power to achieve your wishes and needs.
For many entrepreneurs who are unwilling to face the idea of giving up control, succession is a major cause of contradictions and tensions that can harm family life and jeopardize business results.
The decision to do nothing is disastrous in many cases, and especially with regard to the future of a family business. Paradoxically, many entrepreneurs are reluctant to give up control and prefer to live with an unclear future, deciding that the best way is to avoid this problem and do nothing.
Unfortunately, it is unusual for a company’s exit strategy to be considered at the optimum time – while the company is growing or holding its market position. Instead, owners find themselves thinking about succession and the exit process too late, and they do not know what the exit strategy should be. In order to maintain the high value of the firm, it is best to make the decision on selling the company or handing it over to the next generation as soon as possible. A common problem is that in most cases, the founder has the most know-how and is therefore indispensable for the company. This gives him control and power over processes, employees and the next generation – both in the family and across the company. His reluctance to abandon control and power can even be seen as a personal sacrifice.
We are all mortal, and in order to ensure the continuity and vitality of their businesses, owners should respect succession planning as one of their main duties, and make sure that it runs as smoothly and efficiently as possible.
It is therefore strange that although it is logical to set up a seemingly natural transition (and that there are convincing business and family reasons for succession planning), it is so common for founders to have seemingly chosen to do nothing.
Time goes by. A day, a month, a year, or several years may pass by, and the situation will still be the same – until the moment when, like it or not, something happens!