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What Happens Now? Succession Planning for Family Owned Businesses

“Won’t Someone Take Over for Me?” read a recent headline in the Business Section of The New York Times (01/05/2023).  In the article, Ben Dooley and Hisako Ueno relate the struggles and lack of opportunities for Japan’s business owners to plan for the succession of their businesses.  As the authors state: “An aging society and falling birthrates leave owners of even the most successful businesses without clear succession.  The advertised sale price for one company: zero yen.”

To bring the subject back to the States, consider the HBO hit series “ Succession,” now entering its fourth season in the spring.  Putting aside the dysfunctional familial and personal dynamics amplified in this satiric comedy, the subject, front and center, is about the succession of a family business.  Involved in the process are the attorneys, the lawyers, and, not to be overlooked, everyone else who has a relationship with the key players—spouses, relatives, friends, enemies and on and on.

Obviously, this article is not intended to opine on the problems besetting Japan’s retiring business owners and certainly not to focus on the family melodrama portrayed in a television series. Yet, we can look to both examples as a reminder to business owners that the transfer of their business is a subject that needs to be addressed unless they, too, want to either just close the business down or sell it for zero dollars.

Succession planning is not something that should be delayed until the owner or one of the owners decides to retire or becomes ill or dies.  The key to a smooth and successful transfer of ownership lies with pre planning and a built in process for on going review and execution of adjustments for evolving circumstances or changes in business objectives. 

We suggest that the mediation process offers a setting and structure particularly well suited for family businesses to explore ideas related to business succession. Mediation, in and of itself, focuses on the identification of areas to be covered, the questions that needed to be answered and the information needed for the participants to generate ideas and solution strategies.  Quite simply put, mediation is a problem solving approach.  Yet, perhaps just as important as the intellectual aspect of the process is the focus on communication between and among participants in a safe and confidential environment.  The mediator’s role is to facilitate the exchange of ideas and to foster the search for solutions.  By listening to each other and working together to consider different options and explore different opportunities, participants not only learn communication skills but also learn to mediate differences.

Family businesses are not just about the bottom line.  Familial relationships and generational relationships are also part of the picture.  In the mediation of family businesses, as in the mediation of any family issues, the objective is to maintain, even enhance family relationships.  

author

Lynne Halem

Dr. Lynne C. Halem is the director at the Centre for Mediation & Dispute Resolution in Wellesley, MA. Dr. Halem has worked in the mediation field since 1982. She is on the Family Dispute Service Panel of the American Arbitration Association and a past board member of the Divorce Center,… MORE

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