Succession Planning and Conflict: Should We Start or Not?
I often meet owners who have concerns about succession planning due to conflict with their successors. Sometimes the conflict occurs because of a misalignment in plans for the business, and for others it is conflict within the family. Their concern is whether to start succession planning or do nothing and let the estate plan take care of the problem. My advice to these owners is to tackle the conflict, work through a succession planning process and make sure that issues don’t become major problems later.
Take heart! One of the major reason we have found for conflict arising in a business or family farming operation is lack of clarity for the future. Incoming owners want to know the direction the operation is taking and when and how they will earn ownership in the business. When successors see that there is a process which will answer these questions, anxiety for the future is reduced along with the conflict.
More often than not, fear of starting the succession planning process is caused because the owner or major shareholder doesn’t know what his or her successors really want. Fear of leaving a child out of the succession plan or how to be fair to heirs who are not a part of the business can create a hesitancy to even beginning the discussion about the future of the business. A comprehensive succession planning process should include an in depth discovery process which will include interviews with all the major stakeholders – both inside and outside of the operation. The discovery process will uncover what the participants expect from the business and how they expect to bring value to the business. This process will show where the family is in alignment as well as where there is a misalignment of expectations. Uncovering the misalignments is critical to the process as it allows us to deal with the potential sources of conflict early and prevents a major escalation in the future.
If the conflict is present because of personality styles, lack of communication, or lack of clarity around roles in the operation, these should not be a reason to put off succession planning. You may simply need to spend some time in the beginning working on these issues to create a safe foundation for talking about succession. If you are uncertain about whether you can open the door to these conversations without making it worse, reach out for assistance. Find a trusted advisor who is a good listener and who can help create a safe environment for everyone to be heard.
A great resource for how to have these types of conversations is Crucial Conversations by Kerry Patterson. We recommend this book often to our clients who need a little guidance on how to work through conversations that may be difficult.
The most important thing to remember is that avoidance will not make lack of clarity, misunderstandings or conflict go away. Working through conflict before major decisions are made will make the foundation for your family’s business stronger.
Blog by Rena Striegel, President