- Does your family-owned business falling?
- How to make a Family Run Business successful?
Most often, conflict among family members owing to leadership and wealth management and lack of long term planning lead to debacle of family-run businesses in India
In the view of problems faced by family-run business owners, the following 5 steps will help you to make proper family business succession planning process in the long term.
Step #1: Long Term Leadership and Strategy
It is the first step of family business succession planning.
The family-owned business that lacks long term leadership and strategy doesn’t go a long way. Success and longevity of a business depend on the long term vision and mission for executing strategies.
A family run business often has old-fashioned leadership, which is incapable of formulating innovative execution strategies, involving new capital and people for a longer period.
With paternalistic control over its day-to-day affairs, such businesses are incapable of recruiting external people.
Such a conservative style of doing business may work for a short period but fails in the long run.
A leader in the family-run business must be capable of making an action plan for a longer period to maintain its credibility in the market.
Step #2: Succession Planning
Pathetic family business succession planning has long been the prime reason behind their failure since centuries in India.
The absence of systematic succession planning of business often triggers conflict among family members on the exit of an incumbent.
According to the PwC report, ’Only 15% of family-owned businesses have a robust succession plan.’
During a sudden crisis of leadership, if there is no systematic pipeline of leadership, family members start confronting each other for the succession of business and end up hurting business.