Succession Planning Challenges and Practices in Family Businesses
Rupert Murdoch and his children reached a deal earlier this year to end the succession battle, with Murdoch set to hand over the reins to Lachlan.
Family businesses often face challenges related to succession planning, with leading voices emphasizing the need to identify successors early. Surveys show that over 40% of leaders have not identified a successor, posing risks of closures, loss of jobs, and threats to economic stability.
Walker’s Shortbread in Scotland, founded by Joseph Walker in 1898 and generating revenue exceeding £200 million annually, uses a "cousins consortium" model. This approach encourages extended family involvement, emphasizes consensus decision-making, and can include external advisors and a non-family executive board. Nicky Walker became managing director in 2022. The company highlights the importance of building succession plans that bridge current skills with future needs, while noting that emotional family dynamics can hinder decision-making, making professional succession planning advisable.
Dr Bronner’s in California learned from founder Emanuel Bronner’s lack of formal succession planning, which resulted in tax complications. Current leader Mike Bronner notes that his son Eli is interested in becoming CEO, illustrating the role of family interest in leadership succession.
In Toronto, Mark Michelin, owner of St James Town Steak and Chops, is training his two sons, Noah and Alex, to take over the family business. This training underscores the value of maintaining business continuity within the family and preserving customer goodwill.
Overall, effective succession planning is critical for family firms to ensure their longevity and economic contribution.
