Transition – in business and in life – is inevitable. Many family business owners hope to pass their business or accumulated wealth to the next generation of family members. These same owners often dream of a comfortable and fulfilling retirement, too.
However, research has shown that most incumbents do not properly plan for generational succession, nor are the next generation adequately prepared for the responsibilities involved. Statistically, a successful transition from first to second generation occurs in less than one-third of cases, and only one in ten make it to the third generation.
When understanding succession planning, there are two key elements: management and ownership. Family business owners can achieve the best transition outcome if they devote adequate time and resources to planning the succession process.
A plan for business continuity
We have developed the FREEDOM Framework to assist families in developing and implementing a successful succession plan.
Our unique consulting process uncovers the seven most common barriers to success, and utilises a tried and tested facilitation model to achieve family consensus and a defined action plan to light the pathway ahead.
Have the current owners' accumulated sufficient wealth outside of the business…or, will a transfer generate sufficient funds to properly redress the situation in an appropriate timeframe?
Do the current owners have meaningful activities outside of the business which will sustain them as they scale back their involvement?
Are the current owners able to choose a successor from the available candidates…and is the candidate willing to accept?
Does the next gen have the relevant qualifications and experience, and access to personal development, coaching and mentoring resources to guide them through transition?
Is there a plan which considers contingencies in the case of death, disability or other crisis events?
Do the current and next gens have a shared vision or agreed family values in respect of the family business?
Is there appropriate communication and trust between the current and next gens, enabling effective decisions and the sharing of information?
The consultation process
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Get in touch
Kirsten Taylor-Martin
Partner & National Head of Family Business Consulting
A 50-year-old family-owned business, was founded by a husband and wife team to become a successful business, employing almost 600 staff across three locations in eastern Australia. The business has many long term employees and children...
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The solution
A collaborative approach between Grant Thornton and the family helped ensure the transition was seamless and the succession was ensured. The process included facilitated family interviews, to ensure all family members’ opinions were heard,...
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The outcome
The process resulted in a 20 step action plan to ensure the family and business is succession ready. A tailored Family Governance structure was recommended to focus on creating a stronger future focus and improving communication, alongside...
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