According to the Brazilian Institute of Geography and Statistics (IBGE), 90% of Brazilian companies are still family-owned.
The term “family business” refers to when several family members work in a particular enterprise, both in business roles and as shareholders and board members. According to the Brazilian Institute of Geography and Statistics (IBGE), 90% of Brazilian companies fit into this concept.
Family businesses have great strength: they represent 65% of GDP and employ 75% of the country's workforce. However, research also points to a worrying scenario. For every 100 ventures of this type, 70% do not make it past the founding generation, and only 5% make it to the third generation.
After all, the union between family and business isn't always easy. Intergenerational progress can be accompanied by changes in personal and business ideals. This directly impacts the business, and many organizations are discontinued, either due to external factors or a lack of preparation on the part of their successors.
The positive side is that the legacy can be passed on by developing a good succession plan. In this document, you will find key guidelines for developing successors and how to implement excellent corporate governance practices.
What is a family succession plan?
Discussing business succession isn't an easy task and can involve more emotional issues than business ones. Therefore, it's recommended to hire a professional specialized in the subject to help draft the document in conjunction with the Human Resources department.
Planning involves a series of strategies to be implemented in the long term to ensure the continuity of good management and the permanence of the business within the market in which it operates.
THE management succession program is essential, as changes tend to disrupt organizations. The document serves to minimize negative impacts on the enterprise—and it's crucial that this plan be drawn up as early as possible. This gives executors time to ensure the steps are completed efficiently.
Thus, we understand that planning helps company employees continue their tasks without major changes to their daily routines. But that's not all: these guidelines also help the company's executive ranks by objectively guiding succession planning. Otherwise, there's a risk that subjective judgments will misguide future managers, which can have fatal consequences for the company as a whole.
In other words: for us to have a successful family succession, it needs to be based on data and not on affinities between family members.
How to make an effective business succession?
With this in mind, it's easy to understand the importance of effectively managing a business succession. Professionals responsible for this transition must develop a long-term plan. Once again, we emphasize the need to "pass the baton" early.
Succession development must meet certain objectives to be considered successful. These are:
Analysis and definition of the company's needs in the context of succession and in the months following the completion of the process;
Identifying and training potential successors – if necessary, open the selection process to people who are not part of the family;
Preparation of an action plan for the transition;
Ensure transparency at all stages of the process.
Among the points described above, we need to talk about a very delicate subject: identification of successors. Since we're talking about family businesses, many believe that the next manager should be one of the founder's children. However, while this may be the most logical approach, it's not always a good choice.
Remember: the goal is to ensure the company's continued existence, ensuring it remains strong and relevant in the market. This means, in some cases, including people outside the family nucleus in the succession plan.
How to choose the successor?
We've reached a delicate point in management succession planning. As we saw earlier, family businesses tend to choose the founder's children or close relatives as the next leaders. But this isn't always the right option, as descendants may not be interested or apt to continue the venture.
The question then arises: how to choose a successor? This is a delicate question, but it cannot be ignored, as it will directly influence the entrepreneur's ability to continue.
The simplest way to do successor development is through a career planThis is beneficial for two reasons: all employees know exactly what is expected of them, and it also helps define potential successors for each position.
Within this context, those responsible for the family succession plan need to define what are the desired skills and abilities for the position and see which professionals meet these requirements. After pre-selection, candidates' resumes must be reviewed and a series of interviews conducted to determine whether they share the company's values and mission.
Only then will it be possible to understand who is qualified to join the management succession program. At this stage, we'll determine whether any family members meet the requirements or whether the position needs to be opened to third parties.
With this information, we can clarify the importance of family succession planning for the survival of the business. Another important decision is regarding the investment in automated warehouses.
