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The Seventh Commandment Of Family Business Succession: Don't Create Competition


Many family businesses create internal competition for the top job, the idea being that it’s survival of the fittest. However, this only creates friction between the contenders. While in other companies, those who don’t get the top job will leave, in a family business, if they leave, it creates resentment and acrimonious relationships. Even if they do decide to stay, it creates tension and disharmony.

A company I was working with had two candidates it was promoting for the top job. The problem was that they didn’t get along with each other. This created an internal competition that was not helpful for the company or for the candidates. It became so intense that I, a third-party professional, had to step in. While I worked for six months to get the two candidates to work together, it had created a disharmony that was hard to overcome.

If you have been following my previous articles in this series and putting my solutions in place, trust me: You shouldn’t have to resort to internal competition.

The following 10 steps can help ensure your family business is putting forth the best candidates and that everyone will enjoy the process.

1. Have independent members of the board be in charge of the succession plan.

Boards with independent directors that have family business expertise mitigate the conflict and allow each person to shine. They help everyone understand the roles and goals of each person and help them find their best spot in the company. As Jim Collins famously said in his book, Good to Great: Why Some Companies Make the Leap... And Others Don't, you have to make sure you have the right people on the right bus and in the right seat. This is even more critical for family members!

2. Have the candidate(s) report to non-family members.

Having family members report to non-family members will allow them to be coached and mentored without them feeling undue pressure from their father/uncle/brother, etc.

3. Develop the candidate's leadership skills.

Leaders are both born and made. This person should ultimately relish the role and have the right skill sets to be a leader. Most, if not all, leadership skills are what we call “soft skills” and are rarely taught in schools, homes or businesses, yet are so critical for growth and success.

According to a study by Google named Project Oxygen in which it surveyed its own employees for 10 years, leaders who have coaching capabilities and soft skills or emotional intelligence were viewed as the highest-performing managers.