Death is hardly the go-to topic of conversation for just about everybody. Most of us go to such lengths to avoid talking about it – ever. We hand-on-heart believe that now is not the correct time to dialog about the ‘D’ word. In some spaces and family discussions, the subject is still considered impolite, even taboo.
And rightfully so, as it evokes shivers, considering the loss and grief involved. Little wonder, therefore, that despite it being inevitable, the “D word is still discussed in somber tones such as “if I die…” rather than “when I die….”
But then again, the reality is, death is thrust in our faces almost every day. The faster we realize that nobody is immune then we will learn that the ‘D’ word is as much a fact of life as breathing air is to survive.
Nevertheless, beyond the grieving over the loss of a loved one, a sad scenario by any measure, the downside of not continuing such a discussion, results in further delays on ensuring the existence of an effective succession plan.
This exposes the family and business to crippling disruptions often witnessed, with almost predictable frequency, when the “spark plug” in family-businesses is taken away either by accident or natural cause.
Numerous examples exist including Chief Moshood Kashimawo Abiola, Nigerian business mogul, the family feud between Alnashir Popat and Adil Popal sons of the late billionaire Abdul Karim Popat, the TSS family, in Kenya, among others, some yet to pop out.
What better way to drive the message – of succession planning preparedness – than to adopt a jocular, yet deservingly serious touch of reality through an exercise, we shall call – family ‘fire drill.’
Family ‘Fire Drill’
Schedule a meeting, mentally, “as if” some emergency has occurred in the family, such as death. Rehearse the preparedness of your family and the business in making some serious decisions in regards to handling the tragedy.
Call for a formal meeting, in your mind, and place an empty chair before you to aid the visualization. Dad and Mum are at the background hence unable to neither contribute nor intervene. Ask yourself some sobering questions.
Conversing with yourself and exploring those questions thoughtfully and creatively will benefit both the family and the business. Further, by considering the following questions in their own lives, the family, lawyers and even trusted advisers experience the challenge posed by these questions.
While this list of questions is not exhaustive, it might include some or all of the following:
- Does the family have a charter / constitution? Is it followed and does the family believe in it?
- Supposing no member of the next generation is prepared to lead the company, who is appointed as interim leader?
- If succession plan is incomplete, is there an initial plan written and left with an impartial person?
- Are will, trusts and guardianships up to date?
- Will ownership of the family business be transmitted peacefully in a way that provides control to those who will lead the company, or is it split among many?
- Which financial adviser knows about other investments and are they properly documented? Have beneficiaries already be assigned to these assets? How will estate tax be managed?
- Is there technical knowledge, key business knowledge only known to the current leader?
- Are there joint signatories to the bank accounts, lines of credit?
- How will the immediate cash needs be managed?
- Is there a competent board of directors / advisers capable of managing a transition and confirming the next CEO?
As you continue to reflect on the next item to include in the list, you need to customize the list to suit your unique family. This will help the family prepare in the event that a vacant chair appears at your table.
In essence, succession, continuity and sudden exit fire drills present the family and business with an opportunity to explore transition from many perspectives, and in the context of many triggers. This ensures preparedness by the family and business.
Does Your Family Business Need Help?
Institute For Family Business (IFFB), has extensive experience assisting family businesses. Through private family business advisory support services, Succession risk audits, specialized topic-focused sessions of Family Business Learning Series, IFFB continues to assist family-owned businesses in the region thrive from generation to generation.
For more information on how Institute For Family Business (IFFB) can help your family business survive and thrive, please contact us today at +(254) 722 759 855 or 732 998 655 or email firstname.lastname@example.org.
Peter Ouma Muga – A trainer and accomplished writer on family business management issues, with over 18 years’ experience in family and blue-chip multinational consultancy firms and companies. He possesses an MA Psychology specializing in Organizational Behaviour, and heads human capital at Institute For Family Business (IFFB).