Page 14 - KZN Business Sense 10.5 Lead story Raksha Laghari- eBook

TRANSITIONING TO A NON-FAMILY CEO

A RECIPE FOR SUCCESS IN FAMILY BUSINESSES

or many family businesses, that they understand and respect Ensuring a growth focus across Retention of non-family principles in a transition process
the decision to appoint a this vision, and they ensure generations executives (documented in a succession
Fnon-family CEO can be that all decisions are made with One of the biggest challenges Family businesses often have plan) will allow the business to
a daunting one, especially as reference to it, while allowing facing family businesses is a strong culture in the business continue to grow and thrive for
the business is often built on them to bring their views, based ensuring that they remain underpinned by family values generations to come.
the blood, sweat, and tears of on prior experience outside the focused on growth across and the long-term perspective, The value of attending the
generations of family members. family business. This has helped generations. The non-family CEO which allows them to invest in KPMG Family Business
As family businesses grow and to ensure that the business understands that this can be patient capital. This can be a Conference in person cannot be
evolve, the need for the best continues to grow and thrive difficult, factoring in that family key advantage when it comes underplayed as attendees were
person with the right skills and in accordance with the family’s members may have different to attracting and retaining top able to hear firsthand the stories
experience to lead the business shared purpose. priorities and goals. For the talent, including non-family and insights from the leaders of
becomes increasingly important CEOs. prominent family businesses,
and may require the appointment Phased autonomy from the non-family CEO to be successful, engage on pertinent questions,
of a non-family member as the family to the non-Family CEO it is essential that the family is Governance underpins network with likeminded
CEO. The transition to a non-family united in its commitment to its successful transition individuals from across the
shared purpose and the long-term
At the recent KPMG Private CEO should be a gradual process. success of the business. Good governance is essential for country and even secure business
Enterprise South Africa The previous family CEO any business, but it is especially deals. This series of articles has
family business conference, (now chairperson) gradually The non-family CEO also needs important for family businesses been prepared to capture some
in partnership with KZN Top relinquished control over the day- to understand and embrace the that are transitioning to a non- of the key takeaways from each
Business and supported by Cox to-day operations of the business, upcoming generation showing family CEO. Strong governance session at the conference.
Yeats Attorneys, a prominent allowing the non-family CEO interest in joining the family structures, for the business, the We are here to help
non-family family business leader to take the reins. This helped business, as this not only family, and the owners, should
of a fourth-generation family to ensure a smooth transition enables the business growth and help to ensure that the business In addition to providing you
business shared their insights on and minimise disruption to the prosperity for generations to is run in a transparent and with the platform to learn and
how to make the transition from business. come but allows the upcoming accountable manner, and that engage with other business
a family to a non-family CEO a generation to be a part of the the interests of all stakeholders families at the annual family
success. The family must act on the growth journey. (including the family and owners) business conference, KPMG
promises made to support the are understood and protected. Private Enterprise family business
The chairperson of the board of non-family CEO Clear communication channels advisers understand that family
the family business is a third- between the business and the Concluding remarks dynamics can make it difficult to
generation family member, who When the family appointed family come to an agreement on the best
transitioned out of their CEO the non-family CEO, they in When the family is not in a Although each family strategy for growth.
role. The fourth generation of essence made a promise to leadership or management role, business is unique, due to There is not a one-size-fits-all
the family dynamics, the
the family are currently working support that individual. This it is essential that there are insightful presentation and answer—our advisers can help
in the business, at management means providing them with the clear communication channels robust discussion amongst the you explore all of your options
level. resources and authority they
need to be successful. Once the between the business and delegates in the room confirmed and find the approach that is right
Here are some of the key transition period was completed, the family. Regular meetings that should these principles be for your business and family.
takeaways from the presentation it was evident that the family and open communication are followed family businesses can
and discussion with the was comfortable to step back and key to maintaining a strong make the transition to a non- Alan Barr - Head of Private Enterprise:
conference delegates (which allow the non-family CEO to do relationship between the family CEO a success. It is also alan.barr@kpmg.co.za
included other prominent South their job without interference. business and the family. It is important to note that many of Creagh Sudding - Lead: Business Families:
creagh.sudding@kpmg.co.za
African family businesses): thus important for the non- the principles discussed above
One additional element to the family CEO to ensure there is could be applied to the transition W: https://kpmg.com/za
The pioneering founder’s success of this transition is that a mechanism to facilitate these to another family CEO. It is,
guiding vision is paramount the non-family CEO has an communication channels, however, cautioned that there
The founder’s vision is the excellent working relationship to ensure everyone is kept are some additional nuances
foundation upon which the with family chairperson, informed of important decisions with another family member
family business is built. It is providing access where required and that there is no room for transitioning into a leadership
essential for the non-family CEO and purely on an advisory basis. misunderstandings. role. For either, considering these

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