Diamond Succession Scorecard
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DJM Institute
1. the incumbent leader transfers his know-how and finds a new role
2. the successor is competent and well-motivated
3. there is governance of the family business and of the family
4. the successor finds his proper place in the leadership team
5. the family business is professionally run
6. the succession is carefully planned
7. relationships within the family are good
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  jozef lievens

5. the family business is professionally run
For a variety of reasons it is important for a smooth succession arrangement that the diamond family business be professionally run. For the incumbent leader, this offers the security that the family business will continue to perform well after his departure. And for the successor as well it is important that he finds himself in a professional environment.

Obviously, excellently-performing family businesses have a clear strategy which consists of a strong business concept (product and market combinations) and an ambitious vision and mission. One major advantage of family businesses is that, with a small group of owners, they can work out a truly long-term strategy.

At a certain point in its evolution the diamond family business will for its further development need to rely on non-family professional managers and employees.

It is important that the successor has an eye for the ambitions and aspirations of non-family members who are active in the family business. These include firstly the non-family employees.

There are a number of precepts which must be taken into account by the family members with regard to outside managers and employees (Lambrecht and Baetens, Teammanagement van het familiebedrijf, Lannoo, 2005) :

  • Firstly, the non-family members want to receive responsibilities and opportunities which correspond to their abilities. In this connection, it will sometimes be necessary to limit the number of active family members.
  • Respect and recognition is the fuel of a good relationship with non-family members.
  • There must be honest communication with outside managers about the future.
  • The outside managers must be involved in the strategy.
  • Communication and information are cornerstones in dealing with outside managers. Listening to them is extremely important.
  • Finally, the family must put its trust in the outside managers

Timely professionalisation in the areas of operating and management systems and business processes is important for the family business.

Just like non-family businesses, family businesses must therefore professionalise in the areas of administration, accounting, sales, marketing, production, IT, transport, planning, structures, budgeting, performance measurement, communication, decision-making and so on. This is sometimes hindered by the founder's vision. Family businesses are frequently set up by strong personalities. Their logic is integrated into all of the processes, procedures, rules and habits. Over time this strength becomes a weakness, because it stands in the way of professionalisation.

Equally important in a family business as in a non-family business is the culture of the company. On this level as well there is an interaction between the family and the company, since the culture of the family business is partly defined by the culture of the family. Values and habits which prevail in a family are transplanted into the company. This can be positive when the family culture is characterised by flexibility, openness, innovation and creativity. But here too the problematic of the founder's vision threatens. If the founder is paternalistically oriented, the culture can prove to be more of a handicap than an advantage.


Jozef LIEVENS holds a degree in law and an MBA. He is a lawyer and partner in the Eubelius law firm. He is managing director of the Institute for Family Business and FBNet Belgium. He is an UAMS executive professor teaching the module "Leading the Family Business" in the DJMI Managing the Diamond and Jewellery Course. His website is: www.familiebedrijf.be
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