Succession planning in family firms - spreading best practice

http://www.ifb.org.uk/ The press has recently highlighted criticism of family firms by Professor John van Reenen, of the London School of Economics in a Department for Business, Innovation & Skills (BIS) sponsored report on UK Management Practices, who has blamed poor succession choices in some family firms (p34) for dragging down the sector’s overall performance. Perhaps not surprisingly his research highlights that family firms whose management is chosen on a merit-based policy, have higher productivity than if recruitment of a CEO is restricted to the family gene pool.

It has therefore been pleasing to see that as a direct result of IFB lobbying the Government announced that it will work with business schools to enhance the family business management content in their MBA programmes, so that future family firm leaders are better able to deal with issues such as succession planning.

Indeed getting succession management right is critical to ensure the ongoing success of the organisation. For family firms it is especially important – to help owners the association has published a Family Business Perspectives guide on the subject and succession planning will continue to be a core theme at IFB Forum events.

We are also working with BIS to deliver additional resources to family firms, particularly mid-sized businesses, including more web based information and a new series of seminars on governance and succession planning. This call has been endorsed by Lord Heseltine (pictured), an IFB member, who advocates a stronger role for trade bodies, as is the case in Germany, by ‘spreading best practice and improving performance’.