Universal challenges in leading succession and transition processes

Listen to Cesareo Frias, entrepreneur and family business advisor in Nuevo Leon, Mexico, share his perspectives of some of the universal challenges when dealing with transition from one generation to the next. When considering to integrate the rising generation, it is important for them to gain experience at the ground level, to ensure that they are ultimately able to manage a higher level position. In a family business, thorough succession planning is extremely important for the long-term well being of the family business.

The entrepreneur has to manage everything the organization, and very frequently the son or the daughter wants to be the CEO from the very beginning, and that does not work. One suggestion that I would make is that if he is young he can start working in the company, the family company, but really at the bottom of the organization to learn how to talk to workers, to work on important issues, or subjects, so knowing the company. That is the only way I think that you can make him a responsible person, a mature person. Then scale throughout the organization by merits. The relationship father and son is very, becomes very complicated. Sometimes the father cannot tell his son what to do. That is very normal. So what the father does is he calls an advisor to tell his son what to do, and the son will pay attention to what the advisor says not to the father. Sometimes you have in the second generation a very good successor. The third generation maybe you do not have the capable person, so you have to consider on bringing in somebody else or just sell the company. Now if you professionalize the company, if you have hire a professional CEO, then that is a good part of the solution. I mean, his son is going to be the owner, but he can be at the board level. You do not have to have your son as the leader of the organization, as the CEO. You can have a professional that would be normally much better. Sooner or later you have to pass the leadership, and if you do not prepare, you will have to do it in maybe an inefficient way. I recommend that you start thinking about succession even when you are very young, and you will incorporate all the possible candidates, because if you leave that succession problem to the very end of your life, you will have problems in solving this issue.  He never wants to leave, because he does not trust that his son or daughter or his family is capable of taking the baton. What you tell the father typically is, listen, you sooner or later, you will have to leave this company. Consider this your son is not you, so he thinks differently as you think, as you also, when you took the leadership from your father. I am talking about multigenerational families. Ok, you also did things differently, so you have to be open to consider that. And you have to take the risk, so such is life.