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2011/04 - Charting a Path to Future Success

Charting a Path to Future Success

April 23, 2011

Cara Jenkins | CareerOne, The Advertiser

Only 18 per cent of family businesses have a formal succession plan in place to prepare for the takeover, the remaining 82 percent putting the future success of the business at risk for failing to plan. Business advisers say it can take five to 10 years to appropriately prepare for succession.

TEC Chair Jerry Kleeman says most at the helm of a business have spent a lot of time building their business but are not taking the time to ensure it passes into good hands. ''Many people don't think about it or as an afterthought,'' he says. ''They don't tend to think about it until it's a crisis in the business.''

Mr Kleeman says if the current leaders want to see their business continue to be a success, they need to put a succession plan in place. He agrees the next crop of leaders will need world-class skills to compete in a global environment. It means more planning and skill development is needed for the next generation, which takes time.

''One thing is (leaders) have to be realistic in how long they want to keep working there,'' he says. ''I
often hear five years - it's close enough to touch it but far enough away that they wouldn't think they have to take any steps. If it's somewhere in the shorter term, part of the things they need to do is identify if there's people in their organisations who are able to take on those senior leadership roles.''

If so, he says coaching, leadership and mentoring to develop leadership and managerial skills needs to
take place, either within the company or through external programs such as university or KEY Executive initiative. If successors are not waiting in the wings, leaders need to think about bringing in an external worker to take over and train them if required.

''In many family business before, there wasn't an option. You were going to be in the business,'' he says.

Now more family members pursue other careers or leave the business to work elsewhere but often return to the family business later, he says.

Haigh's Chocolates chief executive Alister Haigh took over from his father John 15 years ago and now
runs the business with brother Simon. As eldest son, he was told ''from a very early age'' that there
was an expectation for him to take over the family business.

While the thought of being king of a chocolate company was appealing as a child, it was not until he
finished school that he realised the opportunity it provided for his career to take over.

He says there is added pressure to continue the success of a family business but mentoring and support, even from other staff around him, does help.

''It's important (to have a succession plan) because it is really just a part of a risk management of
any business to have succession plans for all key positions, especially key positions,'' he says.

He says having a definition of roles and responsibilities to understand what the job involves, as well as personal characteristics required such as skills, is a good start.

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