“you can pick your friends, but you can’t pick your family…”
As founder you have done all the right things to pass the business along to your children. You have prepared a succession plan, setup your estate plan, dealt with the ego issues of letting go of your responsibility and giving up control. You have even planned for retirement and life after the business.
Problem is, the children aren’t ready. All of this planning is wasted if your successors aren’t in position to take over.
One solution family businesses use in these situations is an interim CEO. Interim CEO’s serve as a bridge between the senior and younger generation for several circumstances:
Reasons to Consider an Interim CEO:
- Younger Generation Not Ready
- Low Confidence in Younger Generation
- Sibling Rivalry
- Financial Issues
- Difficulty Choosing a Successor
The younger generation may not be ready to lead the company due to their age and being too young. They may have a training gap with skill sets, experience level, relationships with key accounts, acceptance from the employees.
The founder may have low confidence in the younger generation due to maturity level, work ethic, skills and abilities. There has to be a great deal of trust with the successor in a family business. Trust among family members, is usually a given in a family business (insert joke here). Strangely, it’s not unusual for a founder to have more trust with an outsider who is neutral, no bias, and has a proven track record.
Sibling rivalry can quickly prevent choosing children to lead the future of the business. The dysfunction in the family unit and the effect on the business side is a risk.
Financial issues may also force a business to hire an outside CEO. If a business is experiencing a financial hardship with a bank, the bank may suggest an interim CEO as a solution until the situation has improved.
The founder may have difficulty choosing between several children to be the successor. Forced to choose, the fallout from the others may cause family conflict and be difficult to repair. An interim CEO can be a method of avoiding and postponing this sensitive selection.
If not done properly you just may see yourself running the business again, reluctantly.