Leadership Transitions: Start Preparing… Now!

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Change in executive leadership is predictable, and when planned for and managed well, the transition can reinvigorate and renew a company’s mission, culture, values, and productivity. When mismanaged, however, a leadership transition can destabilize financial performance, erode competitive market advantage, shake employee and investor confidence, and damage company culture. {Alix Partners}

Often referred to as the “new frontier” and the “final frontier”, Africa is positioned to make great economic strides in the global economy in the next few decades. Countries like South Africa and Nigeria have experienced positive economic growth despite the global economic recession of the late-2000. As the Continent relies less on the public sector and natural resources for job creation and growth, the private sector through small and medium enterprises (SMEs), is filling the void, becoming the driver of innovation, diversification and growth.

However, despite the establishment of successful businesses, the reality is that most enterprises do not outlive their founders, and fewer make it past the second generation.

Those organizations that do survive often do so through some form of succession planning, that is, careful preparation to ensure continued, quality leadership of an organization from one generation to another. This process involves planning for a transfer of present ownership and management to key individuals carefully selected to sustain an organization.

The deficiency in the staying power of SMEs, usually as a result of inadequate succession planning, is not an issue that is unique to Nigeria. Studies have shown that 75 percent of all entrepreneurs worldwide are family owned and only about 3 percent of family firms survive past the third generation. There is a pressing need for more proactive succession planning, as businesses should not fall once the founder exits the business. In fact, if this process is approached properly, it is possible for founders to establish and pass on several enduring business ventures during their lifetimes.

Despite these dismal statistics, there are exemplary businesses that have managed to outlive their founders and thrive from generation to generation. Defying the Odds, the first publication of LEAP Africa’s series, demonstrated that it is possible to have successful successions of ownership and leadership in Nigeria.

A compilation of case studies of seven Nigerian organizations that have survived generations, the book looked at the histories and succession experiences of these companies to discern what characteristics helped them “defy the odds”. Though very different companies – diverse in everything from origins and ethnicity to products and services offered – they have seven critical factors in common: strong values, a shared vision, clearly articulated policies, good governance, sound strategies, clear ownership structures, and engagement in succession planning.

Building on this pioneering publication, Passing the Baton explores the need for increased succession planning. This book provides insights and guidelines for establishing a solid foundation for the success process, creating a clear succession plan, grooming successions, and effectively managing the transition.

Although the SMEs and family businesses are the intended primary audience, this book draws on examples from large-scale organizations and corporations and provides relevant lessons for companies of all sizes.

It is LEAP’s hope that this book will be a useful resource and guide for African entrepreneurs who wish to ensure that their businesses outlive them.

Passing the Baton is the fourth in a series of books on leadership in business that LEAP plans to produce over ten years.

Succession planning tends to be one of those “black box” or “taboo” processes that most family business owners seem to delay constantly or at best, totally leave to chance due to lack of information, fear or simply procrastination. Hoping (or even praying) for their immortality, busy owners fail to make provisions or prepare their businesses (infrastructure) and their families (education and training) for the fact that one day they would not be there to “fight the fire”…. Through concrete examples and activities, this text leads African business owners to assess their own organizations, not only making them aware of the fact that they have to be proactive and not reactive when dealing with family business transitions; but also, driving them into action, that is, pushing them to prepare their own succession plans.

Without doubt, this book is a valuable tool to provide businesses owners and their families with reflection criteria, advice and insights on how to handle transitions in family leadership, business management and ownership structures. In fact, each chapter portrays critical success factors of African long lasting family firms, emphasizing succession planning along these three areas, as key indicator for the family business survival over generations. This is definitely a must read for African business families!”

Dr. Rosa Nelly Trevinyo-Rodriguez: Founder, the Family Business Center, Instituto Tecnologico y de Estudios Superiores de Monterrey, ITESM Campus Monterrey, Mexico and co-founder of Trevinyo-Rodriguez Advisors, organization that advises and educates business families.

{Excerpts from the book}. Get a copy today! 

Call 012706542 or send an email to info@leapafrica.org for more information.

 

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