Succession is a controlled process that takes a long time, but if done right, it brings enormous value to the business.
Why start a succession?
Preservation of the company’s wealth
Company founders had to put in a lot of effort to build, maintain, and prepare the company as wealth for their followers. Succession helps ensure that after the departure of the founders, company can continue to prosper and preserve its legacy.
Ensuring the continuity and stability of the company
In family businesses, a controlled process can help manage change, such as generational change, without jeopardizing the stability and continuity of business management. Family members have the opportunity to become more familiar with the company’s culture, values and long-term goals.
Retention of Ownership Control
Transferring the business within the family allows the owners to maintain ownership control over the business at least to some extent. This can be strategically and emotionally important to them.
Transfer of knowledge and experience
Not only at the ownership level, but at all levels of management, succession allows experience to be passed on from generation to generation. Junior employees can benefit from the rich know-how and experience of senior colleagues, which can accelerate their professional growth.
Identification and support of talents
Talented individuals with high potential can be identified and supported through the succession process. This way, the company can ensure that key roles are filled by the best and most suitable employees.
Safety for employees
When owners pass on a business in a succession process, employees have more confidence in maintaining jobs and continuity of the work environment. Often they can perceive this change as an opportunity for further development of the company.
How to do it?
An important prerequisite for a successful handover is the readiness of both parties – the founder/intermediary and the successor. The transferor must make it clear that he can transfer the company/process/position without subsequently interfering with the successor’s competences. The successor should be prepared for a change in his role.
They can be guided in this process by an experienced mentor or interim manager who will help manage risks and set up succession. At New Dimension, we have real experience in the succession of a business owner, but also in small and medium-sized companies, where we acted as mentors.
The entire process involves defining the succession goal, identifying key roles and skills to be passed on, and determining specific steps that will lead to the goal. The key is the development of skills, gaining experience through mentoring and practice, ensuring the transfer of information not only between the transferor and the successor, but also towards the employees. Succession is an agile process in which it is necessary to evaluate progress and react to events in the company. At the beginning of everything, however, there must always be a clear goal and a succession strategy.
The role of the transferor is to build an environment in the company that supports succession, the task of the successor is to be active, to show an interest in self-development, in getting to know the company culture, processes and people in the company. People – employees are the ones who will give very good feedback on whether the succession process is going well. All of this is a prerequisite for successfully managing the succession.
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