Critical Components of Effective Succession Planning for Family Businesses

Effectively and efficiently running a family business comes with unique challenges. A generation of business success and business and family reputation is at risk when a business is transferred within the family.

The impact of a successful succession plan can be seen in several key metric and performance areas:
1. Performance and Productivity
2. Management
3. Operational Consistency
4. Profitability
5. Customer Service
6. Employee Attrition and Retention
7. Employee Presenteeism and Absenteeism
8. Physical Upkeep of Storefronts and Workplaces
9. Community Reputation
10. Vendor Relationships

A report released in 2019 by the Conference Board of Canada and the Family Enterprise Exchange Foundation shed a bright light on the importance of Family Businesses to the Canadian economy:
• Family Businesses accounted for 35% of Canada’s Real GDP
• Family Businesses employed 6.9 million Canadians
• Family Businesses housed 37.4% of all Canadian jobs
• There was a 30% business failure rate between 2017-2019 within family businesses

It is widely assumed that 30% of businesses will not be successful as the business is passed from the first-generation owner to the second. A Deloitte Family Business Survey revealed that with regards to an effective Succession plan, many family run businesses were ill-equipped to have a formal and executable plan that could launch their business into a second generation of ownership:
• 17% of family owned businesses had a formal Succession Plan in place
• 50% of family businesses had an informal Succession Plan or agreement
• 33% reported to have no plan

Mohawk College is Well Positioned to be Leaders in Effective Succession Planning Instruction
IDEAWORKS and the Mohawk College Centre for Entrepreneurship are partnering to develop and offer a Succession Planning course that is aimed at local Family Run Businesses.

We will leverage our existing Family Business and Succession Planning content with updated material and methods of delivery to offer an impactful program designed to prepare businesses to efficiently and effectively pass businesses down to next generation leaders who are prepared to meet the challenges of running a business in a post Covid environment.

Entrepreneurship has long been a cornerstone of success for Mohawk. A look at most recent numbers will show the importance of Entrepreneurial studies at the college and impact on our local community and Entrepreneurial Ecosystem:
• 3 courses with our Business School are solely dedicated to Family Run Businesses
• 2859 students participated in Entrepreneurial programming last academic year
• 211 courses presently teach Entrepreneurship within their curriculum. This spans all faculties and schools within the college
• 109 student business ventures came though the Centre for Entrepreneurship office last year
• 22 business have been launched and are thriving since 2019
• 422 student and community participants have attended our Summit Speaker Series Events on Entrepreneurship to date in 2021.
• The Centre for Entrepreneurship just completed a ground-breaking three-part series on Mental Health for Entrepreneurs and Business Leaders

Mohawk College’s “Critical Components of Effective Succession Planning for Family Businesses” Continuing Education Course
Our “Critical Components of Effective Succession Planning for Family Businesses” will focus on the following topics:

The Family Business Business Governance The 3 Circle Model of Family Businesses Financial Management
The Unique Challenges and Opportunities Legal Guidance and Relevance
Accepting and Managing Through Conflict Accounting Principles
Reasons for Failures and Examples of Success Marketing Strategy and Management
Vision, Mission, Values Administration Necessities

The New Leader Employee Management
Defining and Creating a New Legacy Earning Trust
Leading vs Managing Accepting and Conquering Perception
Leading Through Conflict and Challenge Hiring Strategy
The Importance of Mentorship Retention Strategies
The Need to Work “On” and not “In” the Business Performance Management

Strategy and Execution Transition
Strategic Planning When is it Time?
SWOT Analysis Effective Transition
Business and Family Continuity Planning Defining the Role for the Former Owner
Scaling Growth Change Management for Staff
Metrics (develop, understand, analyze, impact, lead) Effecting Messaging