May 11, 2020
Article
Harvard Business Review (website)

Steer Your Family Businesses Through an Unplanned Transition

By: Josh Baron and Nick Di Loreto

Format:Electronic

Abstract

In a perfect world, family businesses will transition leadership from one generation to the next along a predictable and well-planned process — whether that’s determined within the business, the ownership group, or the family itself — passing the baton after years of preparation. But more and more families are discovering that their transition experience doesn’t follow that path. Advances in modern medicine have increased human life expectancy and productivity, allowing some leaders to continue playing a central role into their 80s and 90s. And this, of course, can leave family members with a false sense of security — of course they will live a long life, they assume, so why even think about planning a leadership transition just yet? Meanwhile, natural disasters, accidents, and illness (as the COVID-19 pandemic has demonstrated so clearly) have the ability to claim many of our loved ones much earlier than we expect. Both scenarios can leave leaders utterly unprepared for the job. But such unplanned transitions don’t have to inevitably end in disaster. With some preparation and creative action, family businesses can rebound quickly in less-than-ideal circumstances.