In many of today’s family businesses, outgoing leaders are often faced with unclear expectations and roles as they begin to transition out of the company. This ambiguity can leave them feeling undervalued and uncertain about their place in the family, business, or even their community. They may experience a sense of loss as they transition away from central decision-making roles, sometimes leading to feelings of depression or a lack of value.
Addressing these challenges requires a proactive and empathetic approach from the larger family. Recognizing the emotional complexity of the succession process and providing support to outgoing leaders will help create a more positive and successful transition for both the incoming and the outgoing leader.
Redefining the Outgoing Leader's Role
To effectively address the challenges faced by outgoing leaders, they, along with the other leaders in the family business, must work together to redefine their roles within the family and the business. Doing this brings a number of benefits to both the outgoing leader and the family business itself.
For the outgoing leader, it offers a pathway to continued relevance and fulfillment, empowering them to continue to contribute to the family’s success in a meaningful way. This can help alleviate the emotional challenges associated with the transition, allowing outgoing leaders to maintain a strong sense of connection and purpose within the business operation. This can come in many forms. A few that we’ve witnessed with our clients include becoming a mentor to the incoming leader(s) or focusing more on the family’s philanthropic efforts outside of the business itself.
For the family business, having the outgoing leader serve as a steward of continuity during the leadership transition from outgoing to incoming ensures that the family’s values, vision, and mission are preserved and carried forward, a crucial element in maintaining the family’s legacy.
This approach recognizes the inherent value of outgoing leaders and provides them with a clear sense of purpose and direction as they transition into this new phase of their lives. This redirection of purpose often leads to a more positive and productive succession process.
Leverage their Wisdom for Continuity Planning
One effective strategy for facilitating a purposeful and seamless transition for the outgoing leader is to involve them in ongoing family governance and continuity planning efforts. Similar to redefining their role, this involvement brings benefits to the individual and the business.
The outgoing leader has been at the helm of the family business, steering it through challenges and opportunities. They have a deep understanding of the business’s operations, culture, and industry in which it operates. Their knowledge and experiences are invaluable when planning for the future. For instance, they can help identify potential risks that the enterprise may face and suggest strategies to mitigate them based on how they’ve overcome challenges in the past. This could range from operational risks, such as chain of command disruptions, to strategic risks, such as changes in market dynamics or the regulatory environment. This experience can help the organization prepare for such scenarios with tangible processes, ensuring business continuity even in the face of future disruptions.
Through mentoring, they can share their perspective and lessons learned to help new leaders understand how to run the business. This mentorship can be key in preparing the new leaders to take on their roles effectively. For example, the outgoing leader can share their approach to decision-making, problem-solving, and team management, among other things. This can equip the incoming leaders with the skills and perspectives needed to steer the company towards future success.
The participation of departing leaders in continuity planning can assist in the facilitation of a seamless transition. They can help the incoming leaders understand the current state of the company, its strategic direction, and the challenges it faces. They can also help to communicate the change to the rest of the organization, ensuring that everyone is aligned and on board with the transition. Open communication is a sure fire way to minimize risk and disruptions during leadership’s transition from the outgoing generation to the rising generation of leaders.
Celebrate their Legacy and Contributions
Taking the time to recognize and commemorate the contributions made by departing leaders to family business matters. This recognition validates their efforts and reinforces the importance of their ongoing involvement in the organization’s legacy.
One way to celebrate their impact is through storytelling. Sharing stories of how this leader overcame challenges can inspire other people—leaders, family members, and other employees alike. These narratives can be captured through various means, such as written memoirs, video interviews, or even dedicated events where the outgoing leader can share their experiences with the family and key stakeholders.
Another approach is to establish a legacy project or initiative in their honour. This may manifest as a philanthropic foundation, a scholarship initiative, or a specific enterprise venture that is aligned with their principles and vision. By creating a tangible representation of their legacy, the family demonstrates their appreciation for the outgoing leader’s contributions while ensuring their impact continues to resonate within the organization.
Succession planning is a critical aspect of organizational management, ensuring the seamless transition of leadership roles. While so many efforts often focus on preparing the incoming leader, many overlook how to support the outgoing leader. This is equally important to invest time and energy in because their efforts have shaped the organization to date. Their departure can be a time of reflection and gratitude, acknowledging their invaluable contributions and the legacy they’re entrusting to the next generation. This appreciation honours the outgoing leader, setting a positive precedent for future leaders as it emphasizes the organization’s values and commitment to recognizing individual contributions.
Beacon Family Office at
Assante Financial Management Ltd.
Suite 519, 10333 Southport Road S.W.,
Calgary, AB T2W 3X6
