Appointing a son or daughter as CEO of the family business is always a bit dicey at best. If multiple children are involved, there’s the political hot potato of who gets the nod. How will employees respond? Will your darling progeny carry on your vision and the cherished business traditions that you’ve spent decades developing? Oddly enough, what is often never properly considered is the most fundamental question of all: “Is Junior even remotely qualified for the job?”
Ownership succession can be an extremely difficult quandary to objectively evaluate. Here’s a short checklist every family business owner should consider:
- How early did you start training the future CEO? Were they encouraged to engage in some type of employment and wage-earning as early as middle school?
- Were they encouraged to attend college and if so, were they accepted on their own merits or through your connections and influence?
- Have they been employed outside of the family business? Did they get that job on their own merits or through your connections and influence?
- Have they ever had the valuable experience and learning advantage of working for a “bad boss?”
- Are they used to solving their own problems and being held accountable or do mom and dad always come to the rescue?
Children who have been overly pampered and “parented” their entire lives will rarely be able to break that unfortunate cycle as adults – much less as CEO of the family business. While nepotism within a family business is certainly anticipated and even accepted on one level, the effective family successor is one who has legitimately worked their way up and “earned” the position in spite of their family connections and fortunate birthright. Engaging an objective third-party consultant to help assess and administer evaluative testing is essential to the process if you truly want a successful outcome and legacy. Employees and customers alike will know the difference and respond in kind.
