Partner and Head of Private Wealth, Hayden Bailey pens a letter to the Editor of Spears Magazine highlighting how founders of family businesses can often leave succession planning too late.
Hayden’s letter says: SIR - As an adviser to multi-generational business families, I was interested in the thoughtful piece: ‘Why are wealth firms ignoring their own advice?’. Certainly when it comes to family businesses, I agree that business founders often leave succession planning too late, whereas the next generation see their role as generational custodian from the outset.
In the season finale of HBO's Succession we are shown that a company rarely starts off as a family business. Entrepreneurs create businesses that can be a reflection of themselves and the way a company operates can mirror attributes of the founder. As Succession demonstrates, founders may find it difficult to let go of a business they feel reflects them, as no-one will run the business quite like them. When the founder dies, the next generation seeks to emulate them, but lacking the same passion or commercial acumen, always feels they are in someone else's clothes.
It takes great courage for founders to transition their enterprises towards a family business with the associated governance frameworks. Not all founders will see this as possible, or will know the right time to start the process. If the business model is not strong enough to outlive the founder's personality, the founders may be best advised to sell, and focus instead on creating a Family Office that enables the next generation to follow their own aspirations.
Interested in hearing more? Our 'Lessons in Legacy’ initiative explores the meaning of legacy and the value of developing family governance frameworks to ensure successful generational transitions. Our reports and podcasts on this topic can be found here.