Specialty Fabrics Review February 2020 - 37

S U CC E S S I O N

ROAD MAP

Stephen P. Miller,
president of GenSpan
Inc. and co-founder
of the Family
Enterprise Center.

n a family business, three
interdependent systems-family,
business and ownership-overlap and
interact, making succession decisions
more complicated, but also potentially more
rewarding, says Stephen P. Miller, president
of GenSpan Inc., in Asheville, N.C., and
co-founder of the Family Enterprise Center
at the University of North Carolina at Chapel
Hill. Miller outlines some of the key topics
and responsibilities associated with creating
a family business succession road map:

Business System Tasks

Family System Tasks

*Determine the education and training
required for company leaders, mentoring,
outside work experience with real responsibility
and accountability.

*Articulate why the family is in business together.
*Determine if there is a desire to continue family
ownership of the business by future generations.

*Create, review and/or revise a detailed strategic
plan to achieve family owner goals.
*Evaluate market dynamics for opportunities
and threats, and develop strategic responses.
*Evaluate the company's strengths and weaknesses,
and create plans to build on the strengths and
reduce or compensate for the weaknesses.
*Identify and develop leaders needed to execute
the company's strategy.
*Identify family members with the necessary
skills and interest to join the family firm.

*Create a shared vision for the business.

*Establish defined roles for family and nonfamily
employees within firm.

*Establish values that guide the family's actions
and influence business culture.

*Identify nonfamily leaders key to the
future success of the business.

*Define the family's goals for the business.
*Define financial goals and non-financial goals.

*Create development, compensation and
career plans for each nonfamily leader.

*Determine incumbent and future leaders
of the business.

*Clearly communicate succession plans
and define individual roles in that plan.

*Clarify which family members are not involved
in the operation of the business.

*Develop an exit plan for the incumbent leader(s).

*Establish a regular schedule for family meetings
to discuss business and ownership issues.
*Consider developing a family council if the family
is larger than just one nuclear family.
*Establish policies on key issues like family
employment, conduct, decision-making,
conflict resolution, conflict of interest and
policy enforcement.

Ownership System Tasks
*Work with legal and accounting professionals
to address financial issues.
*Create an estate tax plan.
*Develop a plan for transfer of ownership.
*Create a shareholder agreement.

*Determine desired succession role for incumbent
leader during the succession process and once
leadership transition is complete.
*Create a management task force to
develop, execute and evaluate progress
on the succession plan.
*Identify who makes decisions on succession:
incumbent leader, board of directors, advisors?
*Establish a process for making
succession decisions.
*Establish a timeline for succession plan.
*Create a communication plan to foster open,
transparent communication at appropriate times
with key stakeholders, including shareholders,
family members, employees, customers, bankers,
advisors and vendors.

*Establish a governance system for the business.
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Specialty Fabrics Review February 2020

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