Not only does the business management and ownership address the question of whether there is a family member qualified to become the successor, but also whether the business has the internal resources to proceed into the future. Perhaps personnel with specialized skills need to be added. Maybe an outright sale is in the best interest of the company, its employees and the family. A search for a strategic partner might be in order. The loyalty of management and employees is often suspect in family owned businesses and, if they stay around, the reason offered is that they have no other place to go or are not qualified to obtain positions elsewhere.
Successful succession requires the loyalty of employees and management.
When they are made part of the planning process, trained to perform their jobs, given the responsibility to contribute to the growth of the company, and evaluated, promoted and rewarded accordingly, their loyalty is rarely lacking. A succession plan that takes into account their needs and concerns receives their support. In our example, not only did planning keep the management team intact, but it produced an even more loyal management crew. Each member expressed relief that the son had succeeded to the presidency and had engaged them in the planning process. Prior to the father's death, several people had thought that the business was beginning to stagnate and had presumed that the father was preparing to sell it, leaving them at risk.