Take a Hard Look at the “Softer Side” of Succession Planning

Take a Hard Look at the “Softer Side” of Succession Planning

 

by Michael Henning

HenningFamilyBusinessCenter

 

In addition to the mechanical aspects of succession planning, there are also a number of personal and psychological aspects that weigh into how one makes the decision to step down or aside. Following is an excerpt of an article that reviews a book called The Hero’s Farwell, written by Jeffrey Sonnefeld. The article was provided by Mike Henning of the HenningFamilyBusinessCenter in Effingham, Illinois.

In his book, The Hero’s Farewell, Jeffrey Sonnenfeld describes four departure styles (Monarch, General, Ambassador, and Governor) based upon his extensive research. Monarchsare found to be in love with their stature and power while at the same time frustrated with their accomplishments, knowing they need to do better if they were to immortalize the company in industrial history, they just need a little more time. Monarchs look to shape their companies into their own images, and they do not leave office by their own choice, but by forcible removal by the board, a successor or spousal encouragement. If not forced out, the Monarch will not choose or train a successor, in fact, they undermine their successor in the name of taking the business to new levels of success in turbulent times. More…

Heir Conditioning:Should Your Children Get The Family Business, or What It’s Worth?

Heir Conditioning:Should Your Children Get
The Family Business, or What It’s Worth?

by Michael P. Kirby

For an owner of a closely held business, few questions cause as much soul-searching as the issue of whether to leave your children the company…or the company’s value.

This may sound like a rational business decision, but it’s not.It’s a choice that can pit your head against your heart, your love for your business against your love for your kids, and your hopes and dreams against cold hard reality.

Not long ago, a business owner in another state asked Banc One Capital to advise him on the ramifications of valuing his company for estate planning purposes.Mr. Lincoln (not his real name) was proud that his two children were both actively involved in the manufacturing business he had founded.However, when his son, the president, had a falling-out with his daughter, the executive VP, it was all he could do to keep their dispute from affecting company operations. More…