Succession planning

“Success without succession is failure” is a common saying in both family businesses and corporate conglomerates. It highlights the critical importance of preparing the next generation of leaders. As founders or senior executives near retirement, ensuring that capable successors are ready to take their place is essential for the long-term stability and success of the organization.

I was invited to speak to a group of high-powered business owners, and as usual, I brought my daughter-boss Rachel with me.

The typical question we would both get from the group as they addressed Rachel would be:

“So, Rachel, you will take over your dad’s business in speaking, writing, and training?”

With her usual warm and disarming smile, Rachel would politely say, “Not really.” In not so many words, her reply would be: “I’m just the family’s quality control – making sure Dad doesn’t retire too soon! I’m the one who’ll keep the legacy running – by making sure he doesn’t quit!”

Rachel excels in speaking and writing but she understands why she won’t take over my business, at least not the core of what I do. My other ventures are not the same as this one. The reason is simple: what I do today is uniquely mine and can’t be passed down.

In other words, my business dies with me. Rather than worrying about how to hand it over, my wife and I have focused on something more meaningful to pass on – values and wisdom, rather than just an inheritance.

When I speak at “Family or Business Succession” conferences, I often challenge the audience, just as I did with this group of successful business owners, by asking:

“Your children may inherit your business, but have they inherited your entrepreneurial spirit?”

In other words, have your children inherited your drive, purpose, ethics, creativity, empathy and values in business? Do they see business as a force for good or merely as a tool for self-interest, selfishness and personal gain?
Our approach to parenting shifted dramatically from focusing on building a business to passing down values, to prioritizing the development of our children’s character and entrepreneurial spirit. This change was sparked by an article about thirty years ago, exploring the profound impact of heredity and environment on descendants’ lives.

The family lines of Max Jukes and Jonathan Edwards have often been used to illustrate the impact of heredity and environment on descendants’ lives.

Here’s a summary of the inheritance and descendants of both:
Max Jukes was a pseudonym given to a notorious criminal who lived in New York in the 1700s. Sociologist Richard Dugdale studied Jukes’ descendants in the 19th century. Jukes was used as an example to show the effects of a criminal lifestyle on descendants.

Over 1,200 descendants were studied:

310 were professional paupers (poor people living off others), 440 were physically wrecked by addiction to alcohol, 60 were habitual thieves,  seven were murderers , 190 were prostitutes, 20 learned a trade, 10 of whom learned it in a state prison.
The total cost to the state was estimated to be over $1.2 million at the time.

Jonathan Edwards was a famous American theologian and preacher in the 18th century. He is known for his role in the Great Awakening and is often considered one of America’s most important and original philosophical theologians.

Over 1,400 descendants were studied:

One US vice president (Aaron Burr)

Three US senators

Three governors

Three mayors

13 college presidents

30 judges

65 professors

80 public office holders

100 lawyers

60 physicians

Numerous clergymen, authors and missionaries came from his line.

Max Jukes’ lineage is often cited as an example of the adverse effects of poor environment, lack of education and moral decay, resulting in descendants who largely contributed negatively to society.

Jonathan Edwards’ lineage is often used as an example of the positive impact of a strong moral and intellectual environment, resulting in descendants who contributed positively to society.

Note: While these studies have faced criticism for methodological weaknesses and overly deterministic conclusions, it’s important to view their findings within the broader context of 19th-century social science. The comparisons they draw, while illustrative, should be interpreted with an understanding of the era’s limitations in scientific rigor and societal perspectives.

I understand this, but the article profoundly influenced my perspective. It convinced me that my primary role as a parent is to instill a healthy approach to entrepreneurship, one that is rooted in strong moral character and the desire to do good.

Today, all three of my children are entrepreneurs working in different fields. But the one thing they all share is their love for God and their families. Many might disagree with my viewpoint, but for me, this is the essence of a good and successful succession plan.

(Francis Kong’s “Inspiring Excellence” podcast is now available on Spotify, Apple, Google and other podcast streaming platforms).