5 Succession Planning Mistakes to Avoid

By 27 February 2018blog

Most of the SMEs located in Ticino have a family nature. Today, among the total amount of 21,000, 8,000 are close to a generation handover. As Prof. Gianluca Colombo says in an interview on Ticinonline, “it has never been so difficult as today to remain competitive and pass the company to the next generation”.

The generation handover and, more in general, any company’s ownership transfer, must be carefully organized to be successful. Our experience leads us to say that there are 5 mistakes to avoid in dealing with a situation like that:

  • Higher focus on fiscal issues rather than organizational ones.It’s fundamental to ensure the company to be competitive and able to generate profits after the generation handover.
  • A too fast handover.It’ s necessary to prepare the ground. The best thing would be to leave the right time to let both the generation cooperate together, in a knowledge-sharing perspective. Rarely this process lasts less then 3-5 years.
  • Lack of innovation.The successful recipe elaborated by the previous generation could not be always valid in the company’s future. If necessary, the courage to question or even to change it is needed.
  • Lack of a business strategy.The business strategy should be defined before starting the handover process and it should be kept stable during this period in order to minimize losses (e.g. market share, key employees and strategic suppliers).
  • Underestimation of the importance of the Board of Directors. Having a structured, effective and independent Board of Directors is a critical success factor during the generation handover.

In Business Up, through a long-term strategic and operational support, we can help you achieving a successful generation handover. Our team has the right skills and resources to prepare the organization before the handover and to support the new generation taking over the company.

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