Dear Family Business Owners,

As we approach the close of another year, I find myself pausing to reflect on the whirlwind of experiences that have shaped my journey in Family Business Governance. After 48 domestic and approximately 51 overseas flights, I am now officially signing off for a well-deserved period of rest and to reunite with my son studying in Canada. 

As we embrace the holiday season, marked by the fervor of gift-giving, marketing blitzes, and lively celebrations, I am reminded of the joyous chaos that defines the end of the year. While this time is meant to evoke feelings of love and cheer, it often becomes a source of stress for many, particularly in the face of a faltering global economy.

Amid these demanding times, it's crucial to recognize the factors contributing to holiday stress and work towards restoring equilibrium. In this letter, I wish to address a topic of paramount importance—succession planning.

The time has come for you to contemplate stepping aside as owner-manager of the family enterprise. Having spent over 30 years at the helm, I acknowledge that knowing when to do it is different from knowing how to do it. I understand that there were moments when you considered succession plans, only to have them interrupted by the unforeseen challenges brought by COVID-19. Now that the pandemic has abated, a sense of reluctance to let go has already been built, and so, the challenges of succession planning persist.

I acknowledge your humble beginnings and how you started from scratch, armed only with grit and determination. And now, you have built a diversified business that continues to flourish and rapidly expand in size and complexity, venturing into new fields. While the specifics of your ownership structure remain unclear to me, I presume you still retain the majority of the voting shares, potentially allocating only a few to your children to complete the ownership structure.

Considering the existence of your children actively engaged in the family business, I want you to reflect on this second crucial point: Avoid the creation of the Prince Charles syndrome. Do not wait for your children to lose interest because of age. You need to start the succession process while they are in their late 20s, not when they are in their 40s — or else, it might just be too late. 

I strongly recommend that you initiate open conversations related to succession. Through these dialogues, you are likely to uncover a myriad of concerns and perspectives that will significantly inform your succession planning efforts. 

Allow me to reiterate my recommendations:

1. Adopt a Different Mindset:

The first step is to change the mindset that has led you and your generation to success. Recognize that succession requires a different approach than the step-by-step, opportunistic mindset that built the business. This shift is challenging but essential for the future of your family enterprise. 

2. Engage Your Children in Real Conversation

Engage in open conversations with your children where you can address their aspirations, concerns, and unanswered questions. Understanding their perspectives will be instrumental in crafting a succession plan that aligns with the family's collective vision.

3. Embrace Governance Issues:

Acknowledge the need for governance changes within the family business. While your generation may have had little patience for governance, it is a crucial aspect that requires attention. The balance between the passion for making money and implementing governance structures that ensure the sustainability of the business is a must.

4. One Step Backward, Two Steps Forward:

Since succession planning has been delayed, it's time to envision the future and plan backward. Establish an action plan that addresses critical ownership, corporate governance, and management decisions. Consider the age of the involved parties—your Gen 2 offspring and the children—as a primary driver for a successful succession.

Succession planning is a complex journey, and embracing it with the right mindset is paramount. By planning proactively, you can set a course that ensures a smooth transition and secures the legacy of your family business.

Wishing you a restful holiday season and a prosperous New Year.