Retirement is on the horizon, and you know its time to lock down a successor to manage your family business. Wisely, you’ve spent the past few months looking hard at the family members working in the business and deciding what you need in the person who’ll take over.
Good for you: one family member has emerged as your top choice for successor.
But when you sit down to talk about succession, you’re surprised at what comes next. Instead of a resounding yes, you hear a firm no. Even worse, the family member tells you they’ve grown disillusioned with the company and offers his or her resignation.
When we’ve seen this happen, we’ve always found that the most important question to ask at this point is the simplest:
Refusals like these tend to birth scandal in the company. Assumptions proliferate, rumors swirl, and before you know it, there is some disruption in the natural operation of the business. Getting to the root of the rejection is important so that you can proactively come up with a strategic response.
Here, it’s important to find out where the “problem” lies: in you, in the family member, in both, or somewhere in between.
YOU — This family member has seen something in the way that the business is currently being run — misconduct, market disruption, inefficiency — and they see your offer as more of a risk than a reward.
THEM — They’re just not that thrilled about you or your company. Maybe you are on the right path, but they simply disagree with where you’re going.
IN BETWEEN — For some reason, relationships have grown sour between this employee and one or more of the other family members working in the business and/or other stakeholders.
Has your successor rejected your invitation and chosen to exit the company? Do you understand why? You may not be able to solve the “problem.” That’s ok. One goal in these conversations is to learn what you can and make whatever adjustments may be necessary.
At the same time, this conversation will help you to control the narrative surrounding your succession. Narratives play a crucial role in successful transition from one generation to the next. This employee may be lost, but the story is surely not over yet.
One more thing, if you are struggling with how to manage the conversation, check out this step-by-step conversation guide from a psychologist.