Passing the baton successfully

AFTER working hard to build one's business and personal wealth, it is natural for business owners to next think about how the business can be successfully transferred to the next generation of leaders and beyond, to carry on the family tradition. After all, it is every business owner's wish to see his hard work outlast as many generations as possible. If we see the family business succession enterprise as a track & field relay competition, it would make no sense to start well on the first leg, but to totally ignore training and coaching the subsequent runners who may not be strong enough to finish the race well.

Unfortunately, very few Asian family businesses see the importance of having proper business or personal wealth succession plans. This is partly because succession planning is closely associated with the eventual demise of the founder, which is a taboo subject in Asian culture. Another key reason is a reluctance, on the part of the founder, to let go of the business as they often focus on merely finishing their own race well and fail to see the family business enterprise as a continuum.

It is not uncommon to find immensely successful entrepreneurs in their 60s, who are reluctant to cede control to their children because they continue to play significant roles in driving growth of the business. In fact, by the time they pass control to their progenies, many of these founders would be in their 70s.