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Succession Scenarios

As the oldest of four children, Seth had wanted to join and lead his family's business for as long as he could remember. As a child, going to the office with his father was his favorite activity. Finding such enthusiasm greatly reinforcing, Dad responded enthusiastically. In time, despite no one actually stating it, everyone in the family implicitly assumed that Seth would come to lead the business.

Years pass. Seth earned an engineering degree from a good college, worked outside the business for several years, earned his MBA, returned to the family business and became a real contributor, eager to succeed his father. Board members and non-family executives, however, urged caution. Despite Seth's obvious strengths, they expressed reservations about his leadership abilities and management style.

Like Seth, his sister Laura also always hoped to join the family business. Moving into a sales position three years ago, she enjoyed substantial success. Her father appreciated her contribution. "Laura is a natural at sales and seems quite satisfied in that area," he said.

But while Laura had never expressed her ambitions aloud, she also aspired to leadership. "I don't understand why everyone assumes Seth will succeed my father, especially since my brother has his problems."

Through discussions with his advisors, the father reached several conclusions. "Seth will not address his problems if he believes he will become CEO regardless. Laura has potential and ambition that perhaps I had overlooked. At least one of our key non-family executives is also a potential successor." He asked his advisors to help him choose among five scenarios.

  • Seth recognizes his developmental needs. With coaching, he develops a much more effective leadership style and a healthy respect for a team approach to management. Ultimately, he assumes the CEO's responsibilities and later becomes chairman.
  • Laura makes significant contributions to the development of the company's sales organization and then rotates through key assignments in other parts of the business. Demonstrating superior leadership abilities, she is ultimately selected by the board to lead the company into the future.
  • Seth and Laura work together to forge a common vision of the future which involves both of them in key leadership positions and has them jointly function as the nucleus of a powerful management team. They find ways to utilize their complementary personalities and skill sets to advance the family business strategically and operationally. As their father nears the end of his career, they achieve an almost seamless transition by assuming responsibility for already clearly established strategies, processes and company culture.
  • Neither Seth nor Laura demonstrates the combination of attributes that inspires the necessary confidence and comfort on the part of ownership and the board. The decision is made to develop additional internal and external candidates for corporate leadership. The family becomes accustomed to non-family executive leadership and chooses to retain ownership and involvement in the business without providing the individual who will be CEO.
  • Neither Seth nor Laura demonstrate the combination of attributes for leadership, resulting in each making a decision to pursue avenues other than the family business. The business is prepared for an optimal transition to leadership by new owners.

The family and its advisors established a five-year time frame for succession decisions and went to work.




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