Just In Case Something Happens to Me…

Just In Case Something Happens to Me…

by Edwin A. Hoover, Ph.D. CMC
and Colette Lombard Hoover, M.S

LSi Resource for Family Business Management

Editor’s Note:The company described in this article is not an actual company but is a composite based on many family businesses we have worked with.The names are fictitious.

The last thing Judy Richardson expected was that her husband Gary would not make it out of the recovery room, dying from complications related to hip replacement surgery. Gary was only 61.The doctors assured him that the risks were few given his good health.No one imagined that a blood clot would tragically end his vibrant life.It was impossible to imagine the impact of the hole left in his family and in the business which he founded and ran for twenty-two years.”Thank God,” said Judy, “Gary left us those instructions about the business!”

Judy referred to the Emergency Management Transition (EMT) letter that Gary had written barely a year before his death.Like most successful entrepreneurs Gary was enthusiastic, optimistic and hard driving.The very same characteristics that make business owners successful also make it difficult for them to think about their mortality and planning beyond it. More…

Developing Succession Strategies A High Priority for Family Businesses Around the World

Developing  Succession Strategies A High Priority for Family Businesses Around the World. As more surveys are completed about family businesses, it is becoming possible to compare family businesses in different countries.

Some recent examples:

  • A recent survey of 200 family business owners in more than 20 countries shows 65% saying the company’s management should remain in the family’s control in future generations. The survey, conducted by the International Institute for Management Development (IMD) in Lausanne, Switzerland, found that, “The tendency to prefer a ‘family solution’ for managing these companies also seems to increase with the age of the company and the number of family members active in the company.”  
  • The same survey by IMD suggested that family businesses unable to plan for family succession are likeliest to prefer using non-family members as managers while retaining ownership to going public (by 57% to 33%).  
  • A survey of 1,000 American family businesses conducted this year found more than 40% saying that they are placing a high priority on succession planning. The survey was conducted by MassMutual, and showed the percentage of family businesses doing succession planning had increased substantially over each of the last three years.  
  • A 1993 study of French family businesses showed that only one-third of owner-managers between ages 50 and 60 had decided on a succession strategy. More…