A change of leadership is a challenging time for any organisation; especially if the person stepping aside is the founder. One only has to look at the numerous examples throughout history, to see how a failure to get it right can end in disaster.
The recruitment agency REED could definitely be classed as a business that got it right. Since replacing his father as chief executive in 1997 (and then as chairman in 2004), James Reed has grown the business into the largest family-owned recruitment company in the world.
"I would characterise it as a subtle 10 year transition. When I first joined in 1994 my father would ask me my opinion and then make the decisions, and somehow by the time I took over as chairman in 2004 it was the other way round.
"Of course not every business will be able to replicate this model, but it’s about having a strategy in place. As a family business we got lucky in the fact that I wanted to do it and my father was a good teacher.
"The way that we run the company also helped make the transition smoother. It’s a triumvirate, so we have three senior directors running the business at any one time. Now it's me and two non-family members but for that period of transition it was my father and I and a non family member.
"This is particularly helpful in a family business because if two family members disagree the third member can join with whoever he or she thinks is right, so it stops impasses.
"As long as it's understood that the majority carries the day, rather than simply the oldest family member then that is a good working model. As long as everyone understands and respects that I think it is a good way for families or founders to manage a transition."
FOR MORE INFORMATION
Here are more lessons in how not to do succession planning. Haggis magnate Jo MacSween explains the secret to a harmonious family business, while Andrew Nisbet argues that entrepreneurs should aim to pass the firm down rather than going for a quick exit in this piece.
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