Redefining Succession to Transition

With an ageing population in New Zealand, succession planning is becoming more important as time goes by. For some businesses, the planning is purely around positioning a business to sell. However, for most privately owned businesses in New Zealand, succession planning comes with the added complexity of keeping the business in the family.

Nearly everyone in a family will have a differing view on succession and how and when the transition should take place. Most of the time, family values underpin these views and this makes the transaction personal. Treating family with equality and fairness often results in compromising the business in some form and there’s not a simple “one-size-fits-all” approach.

What if the complexity around succession changed to transition?

Often the focus with succession is transactional. The business or farm is simply sold to the next generation. This can result in an established business with new owners who might not be fully equipped with the skills to move the business forward successfully. If you reframe succession to transition then one phase of the transition could be a focus on the evolution of skills and capability within the business. This would also reduce the complexity and increase the focus on what’s required for the future of the business.

Things to consider are:

·      Documenting the vision and strategy of the business so that successors/families understand where the business is heading.

·      Growing your business, as this opens up options for succession.

·      Having a structure that holds management accountable for the decisions made in a business.

·      Outlining the roles and responsibilities within the business as this provides pathways to nurture and develop successors/family members for future succession/transition. 

·      Seeking professional support to help manage family dynamics.

Gunson McLean has the expertise and can help with all aspects of your transitional planning and processes.