Why do I need to seek outside advice during the succession process?
Obtaining outside advice during the succession process is crucial for most business owners, especially for founders. Being able to discuss the issues you are facing with others who have been through the succession process is invaluable.
In addition to traditional family business advisors, many family businesses find that reporting to a board of directors or advisors can be very useful, both in the succession process and in business management in general. When choosing board members, it’s especially useful to include non-family members. Outside board members can help to:
• Maintain focus on business goals – Just the process of preparing reports for the board will help add focus for those involved.
• Identify new ideas – Outside board members can bring new ideas and insight to the business. In fact, when choosing board members, try to name members who have different skills from your own, or who have knowledge of areas you’ve identified that could be improved.
• Contribute impartial feedback (positive and negative) – It is difficult to be objective about any issue when you are involved in the introduction and development of new ideas. Outside board members can bring a fresh outlook to these issues. In addition, non-family board members can be used as a sounding board for new ideas.
• Add professionalism to the business – The process of meeting with a board regularly, reporting to them, and receiving feedback will add professionalism to the business. However, to maintain the professionalism that can be created when choosing prospective board members, it is generally a good idea to exclude close friends.