No matter how skilled and capable your child might be, you can’t ignore the fact that others in your company will presume that his pending promotion is due to family privilege, not ability. You will never convince anyone that you chose a family member solely based on performance, but the successor can at least show that he is working for the job.
As we have already discussed, it’s usually desirable for your successor to work at another company so that he has experience working outside the “old man’s shadow.” Then, while working for your company, the successor must show that he’s capable of working hard and putting in the hours. He should make a point of developing his own relationships with managers and employees in all departments. And as much as possible, family relationships and the company organization chart should be separate. In discussions with employees, Junior should refer to John or Mr. Doe, not Dad.
Be clear with employees about the future direction. Once the decision is made that a family member is being groomed to replace you, communicate that fact to key managers and employees.
Don’t forget about customers. Let your most important customers know one by one at lunch or some other face-to-face setting. Ask them to keep it confidential until the announcement; they will appreciate this gesture of trust. Notify the rest of your customers by personal letter to arrive at the time of or immediately prior to your formal announcement. Don’t let them be surprised.
In a family business, it’s not necessary for the would-be successor to sign an employment contract unless other top managers have them. On the other hand, he must have a clear understanding of his role in the company, your expectations of him, when raises and evaluations occur and the strategy of the company.
Pay your family successor and any other family members on the same basis as other employees. Salary should be based on responsibility, experience, skills and hours worked. You really shouldn’t be distributing your company’s profits to family members in the form of salary. Ask other trucking company owners, your CPA or perhaps an outside board for help in establishing a uniform compensation plan.
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