Management. This is the backbone of any business and definitely the essence of a family business. Why? The management, whether the knowledge of the business, the “secret sauce”, resides in the sole entrepreneur or in a team of key players, is critical to a company’s long term success.

Much of my past posts have focused on business succession, passing the company from generation to generation. Well, you first have to maintain, grow and nurture a business to ensure its continuing success and to address bumps in the road as they occur. This is where your management team can be instrumental in keeping the business going.

I was inspired to write about this topic having recently read an article about a major chartered accounting firm where a new CEO was appointed. Within the year, that CEO was already setting in motion a strategy to nurture and coach candidates to replace his own CEO position. That is forward thinking. Often, CEO’s will do the exact opposite and build walls around their position, a castle often, to protect their position and longevity, often to the detriment of the business.

Sharing the key elements of a business with management requires trust, of the employees and management. The potential upside is that should you have any sudden absence from the business, it could continue to operate, with your trusted lieutenants at the helm.

Do enter this plan of implementing management succession with your eyes wide open. It does have risks. You could have a “bad” employee that steals the ideas of the business. Protect the business with appropriate fiduciary and non-competition clauses in employment agreements. The upside as outline by Adam Gant, famed Harvard professor is that those who are givers (share business plans and company management), if done strategically and with thought, will often succeed to a greater degree than those who are takers (top down method of management and are secretive and not trusting).

Think about management succession as you consider the succession of your business generally. It will certainly help in formulating the necessary plan for your succession plan.

Learn, think, apply!