How much should you tell your employees about your succession plans?

Business Leader Post, April 11, 2012

Thomas D. Davidow, Ed.D.

Employees worry about your family’s plans for succession as much if not more than family members do. If your family does not have a plan, and the future of your company is an unknown, your employees are anxious about that because their futures are entwined with the future of your company. Uncertainty not only puts you at risk of losing your best employees; it also has a negative impact on your ability to attract the best senior management.

Family business owners are analogous to the Royal Family in England. Your employees are always watching you. They love to talk about you. My guess is that the most popular three topics at the water cooler are family, family and family. They are keenly aware of who is getting along with whom and who is not. They have thoughts and ideas about the next generation. Sometimes their notions bring them comfort and other times great concern. How many times have you heard, “I will stay with you (the senior generation) but when you go, I go”?

A family that is engaged in a visible succession process always brings employees comfort and hope. My anecdotal evidence is based on my interaction with employees, most specifically the secretary who handles the family’s/senior generation’s appointments. Secretaries know “everything” that is going on in the family and guard the confidentiality of that information like CIA agents. But they are always incredibly helpful and gracious to me in setting up appointments and meetings. They understand how important it is for families to communicate with one another about sensitive and challenging business topics.

It has been my experience that a family business profits in many unseen and not so subtle ways when it shares its story of addressing the issue of succession. Relationships with customers, suppliers and banks also have more value. Before you can share your vision of succession, however, you need to develop one.