Strategies for succession
In Japan, a determination to keep businesses in the family has led to the striking phenomenon of adult adoption. The country has some of the highest adoption rates in the western world, but more than 90% of those adopted are adult males.
This allows firms to maintain their family dynasty, with a male at the head of the company who shares his name with its founder. The man is typically married off to the head of the firm’s daughter, taking her name and family as well of the reigns of the company,
The phenomenon isn’t something confined to small family firms. Car and motorbike giant Suzuki’s CEO Osamu Suzuki is the fourth adopted son in a row to run the company.
Japan’s oldest continuously family-run business, Hoshi guesthouse in Ishikawa, has practiced adult adoption for centuries, keeping it in the family for more than a millennium. It was founded in 717 by Garyo Hoshi and has been run by 46 generations of Hoshi since.
While you may not be planning a succession as dramatic as a coronation, or be willing to go to the lengths of adopting a new family member, there are some things you should bear in mind while planning a family business succession.
- Think carefully about who to nominate as your successor. It may seem natural to choose your oldest child, but age is no guarantee of ability.
- Plan well ahead. The more time you have to think through your succession plan the more smoothly things will go when it happens.
- Take thorough legal advice. It’s important to know exactly where everyone stands.
- Train your successor well. It’s worth taking the time to ensure they know the ins and outs of your business almost as well as you do.