And not your kids….
HBO’s Succession depicted the complex dynamics of passing down a family business, painfully reminding the viewer of the potential challenges and pitfalls of transitioning leadership to the next generation. Having worked with many family businesses, these dynamics can be all too real and can not only wreck family holidays but can divide families over the long term.
Transitioning your business to your children is less common now than in the past and for good reason. Only 30% of family businesses survive the transition from first to second generation ownership. And only 12% survive the transition from second to third generation. Source
In this context and having spent almost 20-years working in Employee-Ownership and with Worker Worker Owned Cooperatives, I kept hoping the experience senior leadership team of Gerri, Frank and Karl would take the reigns in Succession. I have fun imagining what the show would have looked like if it was about a succession plan to employees and not the kids!
Here’s why I was routing for an employee takeover:
1. Meritocracy and Professionalism:
Transitioning your business to employees ensures a merit based approach. By selecting the most qualified individuals within the organization, regardless of familial ties, you prioritize professionalism and competence over kinship. This allows for a seamless continuation of operations, maintaining the high standards and expertise that have contributed to your business’s success.
2. Continuity and Institutional Knowledge:
Employees who have worked within your company have a deep understanding of its operations, values, and culture. They possess institutional knowledge that can be invaluable during a transition. By entrusting them with the business, you ensure continuity and minimize disruption, as they are already familiar with the intricacies of your industry and have established relationships with clients, suppliers, and other stakeholders.
3. Fresh Perspectives and Innovation:
Transitioning your business to employees allows for the introduction of fresh perspectives and innovation. Employees who have been with the company for a significant period often have unique insights into its strengths, weaknesses, and potential areas of growth. They can bring forth new ideas, strategies, and approaches that can revitalize the business and propel it into the future.
4. Motivation and Commitment:
Employees who are given the opportunity to take ownership of the business they have helped build are likely to be highly motivated and committed to its success. By empowering them with increased responsibilities and a stake in the company’s future, you foster a sense of loyalty, dedication, and accountability. This can drive them to go above and beyond to ensure the business thrives.
Logan Roy knew his kids weren’t the right fit for the leadership of the Company, he just didn’t have the heart to tell them directly. Intuitively, you know if transitioning to your kids is the right decision, or if you need to be exploring other options. If you are curious about what an employee-ownership transition could look like, reach out. There are many different ways to achieve employee-ownership as a succession plan and we can help you find the way that works for your unique company and situation.