The management transition process isn’t just about the successor assuming the duties of the current CEO, but also the process of other family members and key employees adjusting to a new leader.
It’s important for the current CEO to support this transition process, as it allows the successor to make changes without them being perceived as an indictment of the past or as criticism of the predecessor.
In addition to learning how to manage the day-to-day operations of the business, successful transitions require passing on “strategic thinking skills” to the successor.
To be successful as a CEO, the successor has to learn to become a leader, not just a manager. Leadership revolves around vision, ideas and direction and has more to do with inspiring people than with day-to-day implementation. Top managers recognize their ability to attract and motivate people will largely determine their success, as well as the success of the business. A leader is great not because of his power, but because of his ability to empower those around him.
Leaders must be able to judge the strengths and weaknesses of the business, assess the opportunities and threats in their environments, and most importantly, identify which issues are most important and deserve their closest attention.
Strategic management is largely a matter of anticipating the future. That involves recognizing emerging problems before they occur and taking corrective action while the window of opportunity for effective response is still open. In fact, the definition of strategic management is the leader’s ability to anticipate, adapt to, drive and capitalize on change.
The top managers spend more time thinking about “what if” scenarios and developing contingency plans. They don’t dwell on the negative but consider what could go wrong and how they’ll react if it does. It’s no different than what coaches or generals do as they develop game strategies or battle plans.
Successful managers spend a great deal of time monitoring and analyzing performance. By doing so, they are much more likely to spot problems and opportunities before it’s too late. They are more likely to be treating the cause and not just the symptom of a problem. In addition, they always use two analytical skills to solve problems.
It’s important to recognize it’s the planning process—not the resulting document—that matters most. The strategic planning process involves both internal and external environmental scanning. This is often described as a S.W.O.T analysis, which identifies strengths, weaknesses, opportunities and threats.
The process can be threatening and frustrating to action-oriented managers, who primarily view the necessary brainstorming as a waste of time. However, it’s only through the S.W.O.T analysis that a clear vision can be hammered out to direct the future of the business and what it will take to get there (which includes implementation and exit strategies).
Over the long term, the success of a family business requires not only a shared vision but also a strong set of common values. As families continue to grow and age, these goals and values will inevitably become more diverse. This is particularly true when the family members involved in the business also include multiple generations of cousins or in-laws who grew up under different family influences and not just siblings who grew up in the same family.