26/07/2006

Our Most Recent Communication in the Australian Financial Review

Thank you for continuing to highlight the importance of succession planning. The three articles in a recent Enterprise section go some way to describing both the issues and attempts by practitioners to solve the problem confronting many business owners exiting over the next few years.
A number of intertwining complexities surround succession - and these are drawn as much from the financial side as the people side.
The financial settlements of a succession and exit transaction are not always the most challenging aspect. Just as important are issues surrounding the psychology of expectations and change that can often emerge from a wide group of players in the succession maze.
This can range from the expectations of entitlement (of children, for example) to a loss of identity (on the part of the exiting owner), to dislocation created for a business when executives are aggrieved by a change of ownership and/or management to the extent that they leave, taking much of the corporate wisdom and culture.
When the present owners wish to introduce new (external) management, the succession and handover can be complicated further by the reluctance of the owners to let go: talented chief executives do not welcome micro-management imposed on them.
The complexities of succession tell us it's a multidimensional problem needing a multidisciplinary approach through the collaborative efforts and understanding of key advisers.
Bill Hovey,
Chief executive, The linchpin group australia,
Crows Nest, NSW.

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