You plan on taking over the family business and you have talked about it with the owner-manager. He is inclined to consider you as his successor.

It is time to take action. Take your career into your own hands and create an action plan.

The following elements will help you establish a plan for the transfer of management.

1. Clarify the owner-manager's expectations of you

What are the knowledge and skills required to take up the targeted position and fill the void left by the departure of the owner-manager? What about management skills?

How will your performance be evaluated in terms of these skills and your capacity to take on the role?

Are you the only candidate in contention? Are you going to be required to lead the company with other members of the family or with certain executives of the company?

These questions are important in preventing and settling conflicts. The requirements and selection criteria of the person aiming to head the family company must be clearly established.

The expectations must be known on both sides, much the same as any person from outside the company would expect to know them. The larger question is: what are the expectations that my owner-manager parent and my family have of me as the head of the family business?

2. Contribute to drafting the strategic action plan for the company

A strategic action plan brings together the decisions on the company's issues and its ownership. This exercise is required in implementing a succession plan. Do not be overwhelmed by the name of the exercise. In summary, the strategic plan (PDF) sets out the major lines of orientation of the company. It clearly sets out the objectives and the means for attaining them. It helps target the skills that will be necessary for the company's growth.

In the context of a family business, this exercise will include thinking about the objectives of the family members. Using the "Lifeline" (PDF) will help you think it through.

The strategic plan will be valuable to you as the successor of a family business. It will allow you to have a say in the future of the company and will give you the possibility to evaluate its potential. You will see just how much you want to work in the company. You will see in what ways you will be able to demonstrate your personal skills and your capacity to create a new vision for the company.

The strategic plan will also be very useful when the time comes to finance the transfer of ownership.

The strategic planning exercise requires an in-depth examination of the company's position, its opportunities and the threats it faces. Have confidence going into it, but if you are not familiar with this kind of planning exercise, seek the assistance of a consultant in the domain.

3. Evaluate how realistic the expectations are in terms of your current position

Working with the owner-manager, draw up a list (PDF) of requirements for the targeted position, covering areas such as knowledge and experience (academic training, external and internal experience), skills (leadership style, judgment), and attitudes and value (openness, respect, entrepreneurial spirit).

For each of the elements on the list, evaluate your current position vis-à-vis the requirements.

To evaluate your skills, you can call on specialists. Among others, management consultants or human resource consultants can provide assistance in this area.

What path must be taken to meet the requirements? Do you feel under attack to meet them?

4. Working with the owner-manager, establish a training strategy for the successor

Using the list of requirements for the targeted position, determine the means by which you will be able meet each of the identified requirements. You must be proactive... this is about your training.

While the means to acquire the knowledge and experience are usually straightforward, acquiring the skills in management often represents a bigger challenge. [Things to consider in the strategy for traning the successor (PDF)]

On this point, the help of a coach or mentor (PDF) will be very useful. The owner-manager does not necessarily have the required abilities to ensure the transfer of his skills to the successor.

A mentor might also help you think through the training process. At certain times you might have doubts, feel uncertain about your abilities or your desire to keep going. It is worthwhile to talk about this with someone who is neutral, who has some distance from the process, and who can help you see the situation from a different angle.

Do not discount belonging to a network. Information is the key to power and to making an informed decision. Attend the activities on topics such as succession, financing, human resources, and even business succession that various associations organize. Become a member of a network of young leaders that are also successors. These networks or associations have been around for several years and new associations are created regularly. You will find that the conversations with the next generation of leaders are fruitful.

Do not forget that your training strategy should include an introduction to the stakeholders of the company:  members of the management team, employees, clients, suppliers, bankers, etc.

So that your career development proceeds to your satisfaction and that you will be in a position to evaluate your progress, take the list of requirements for the targeted position and create a calendar and a timeline for each of the anticipated activities.

Plan for an evaluation and a debrief of your experiences.

If you must undergo several formal evaluations before taking up the position, the timing of the evaluations must be determined in advance. The more rigorous the training and evaluation process, the more credibility you will earn in the eyes of your family, the board of directors, management, employees, and financiers.

5. Talk to the owner-manager about his exit strategy, including his expected departure date

It is important for the owner-manager to set an exit date and a retirement strategy. This is something the outgoing owner-manager should commit himself to.

These decisions belong to the owner-manager and must take into consideration the nature of the situation. A date far enough into the future allows sufficient time for a satisfactory transfer of knowledge, skills and power. However, while it may be difficult sometimes for a parent to let his child spread his wings, the moment cannot be delayed for too long.

An owner-manager must choose one of three exit scenarios:

1. Complete withdrawal from the company activities
2. A role as president of the board of directors or as special consultant to the successor
3. An active role in another position, such as business development or public relations

Choosing one of these types of exits mostly depends on what the owner-manager would like to do. The same goes for the success of the exit.

6. Be aware of the issues that will undoubtedly arise over the course of the transfer of management

Taking over the management of a family business is a big challenge. Be reassured. The issues may be numerous, but they are not insurmountable.

First, there is a question of what is expected of the family member who is taking over the business. Whether it is the members of management, employees, other family members, clients, suppliers, or financiers, the successor has to earn creditability from each, fill the shoes of the person before and deal with prejudices that getting the position is the result of being a son or daughter of the owner-manager. The margin of error is not very wide, and the responsibilities that go with the position can be intense, especially at the beginning.

In terms of the other family members, understanding the three circle system (PDF) that characterizes a family business will prove to be a valuable tool.

It is possible that you will have to co-manage the business with another family member. How do you feel about this possibility? Are you prepared to share the responsibilities with someone else? What often happens in these situations, even though everyone holds positions at the same level in the hierarchy, is that one among them emerges as a leader. Would you be able to handle such a situation?

You will likely have to manage other members of your family, which requires diplomacy and a certain amount of sensitivity. You will have to be able to show that you can be firm but also generous and open. You have to be transparent and capable of dialoguing.

In general, working to maintain familial harmony is an important issue in the success of a transfer to the next generation. Being aware of this is already one step in the right direction.

The co-management phase is a period during which you will evolve alongside the owner-manager to achieve the transfer of knowledge and power, which will be demanding in terms of the personal relationship. The quality of the relationship between yourself and the owner-manager before this phase begins will have an influence on the relationship. Flexibility, openness, and respect are key words for the success of this step in the process.

Finally, be aware that it can be very difficult for the owner-manager to disengage. However, a successful exit is essential to the success of the transfer.

7. Improve your chances of success

Research on business succession is conclusive: in addition to planning, communication and respect are undeniable factors in the success of the process.

If it is yet to be done, you can help put in place a family council (PDF). This is a structure than can assist you in communicating with the other family members.

8. Do not hesitate to call on experts who can assist you

Becoming involved in the transfer process is demanding. You should seriously consider calling on experts who are specialized in this area.

As a first step, think about a consultant specialized in strategic planning. He will be able to help you contemplate the future of the company. When the time comes to draw up the list of competencies and skills required to take over running the company and establish a plan to train the successor, the help of a consultant specialized in human resource management will be most valuable. This person will, among other things, be able to establish a successor profile that will complement the skills of the co-managers or the management team already in place.

As mentioned in point 4, also give some thought to consulting a coach and to call on the services of a mentor. A mentor could be particularly useful during the co-management phase. Because the mentor is respected by both the owner-manager and the successor, he can be a buffer during this period when communicating can sometimes be difficult.

Be wary of specialists who are specialized in everything. Most of all, be wary of packaged solutions. Skilful people know how to work as a team and rely on one another.