The need for greater formality and management structure
Generational succession often requires a greater level of formality in the management and decision-making process.
This formality should achieve a separation of function between:
- The Board of the company, and
Often in a small or medium business, roles can merge with no clear dividing lines or boundaries.
Roles, responsibilities and clear key performance indicators (KPIs) for management should be agreed and documented. For management, this needs to include clear job descriptions, authority levels and operating expectations.
Generally, a more formal and functioning Board of Directors is required. The process may also be assisted by the inclusion of non-related, non-executive Directors. They should assist to provide some balance between the two generational groups.
Where there is a functioning Board, they should meet on a regular basis and receive and direct management in the strategic direction of the company.
In ensuring the long-term success of your business, it is critical to establish a well-designed succession plan. Coordination of the transition of your business to your successors can be an arduous process.