26 May Succession Planning in Argentina
Succession Planning in Argentina
In Argentina -as in any country- planning for a smooth succession can be one of the most complicated transitions that a family business will experience. The family must recognize that it is never too early to start discussing succession and that the costs of getting succession wrong can be catastrophic for the business. These challenges mean that family members must focus strongly on succession planning, giving it their attention on many occasions.
Succession planning in Argentina typically involves business considerations, such as merit, and feelings and emotions. This mixture of sentimental and financial concerns can make succession a very complex topic.
Family businesses often face significant challenges in getting succession planning right. Of course, they need to decide whether to select a successor from within or outside the family. Several family members may be willing to take over, and talented non-family members may also be interested in leading the company. Then, if the business designates a young family member as the successor, it must define a plan for how he or she will prepare for the role and gain acceptance as the leader by other family members and executives. Finally, the departing leader must be willing to let the successor take charge as planned.
How to achieve succession success
Succession planning should start as soon as possible. Although things may change along the way, leaders can often anticipate the potential scenarios for how the family will evolve. Issues to consider when developing scenarios include the number of children in the next generation and whether those individuals are interested in the family business as a source of full or part-time employment or purely as an investment. Families should also consider how the scenarios would be affected by marriages or the sudden demise of a family member or potential successor. It is important to plan a succession process and outcome that will work for the different foreseeable scenarios.
Although setting expectations, philosophy, and values are central to many family-business issues. In fact, we have found that doing so is essential when it comes to succession planning and must be done upfront, even if the specific mechanics of succession come later. In our experience, the family businesses that thrive and succeed across generations are those that possess a core philosophy and set of values linked not to wealth creation but to a sense of community and purpose.
Long before decisions will be made about specific potential successors, the family must agree on overarching issues. For example, whether family unity will take precedence over wealth creation. Or if all branches of the family will have an equal ownership right and voice in decisions. Also, if decisions will be based purely on merit and the best interests of the business. These guiding principles will provide a framework for more specific decisions.
Succession Planning in Argentina
Actually, succession planning never really ends. In fact, it helps to ensure that your leadership team has the strength and skills to deliver your strategy. It manages to create a system for identifying, assessing and developing an organization’s talent. With a systematic approach to the identification and development of talent, your leadership capability can keep pace with your business growth and challenges.