This shift leaves much of the family-owned small business sector knee deep in the challenges of succession planning. A new report underscores the bleak imperative to address this crisis. A study set for release in 2025 warns that a lack of succession planning could lead to increased business closures, job losses, and economic uncertainty. This situation is especially important for family businesses, in which leadership changes can greatly affect the firm’s function and health.
Dr. Bronner’s was started in 1948 by Emanuel Bronner. In the 1990s, dealing with some serious health problems, he largely removed himself from day-to-day operations of the business and the transition was rocky. Sadly, he hadn’t put in any succession plans, formal or otherwise, which put the company at risk. Mike Bronner, the current head of Dr Bronner’s, joined us to talk about his family’s journey. He was firm in his assertion that they “took from that” incident.
Dr. Bronner’s passion for bringing the whole family into the enterprise. They particularly motivate the next generation to stand up, engage and make their voices heard. In recent years, Mike Bronner has observed his kids develop a passion for leadership within the company. He is particularly energized by their spirit of taking initiative! He said, “Since we’ve put the next generation at the center of what we do, we’ve been insisting on maintaining our values. We want to make sure that two generations from now, our values are still leading us.
At the same time, Walker’s Shortbread offers an instructive counterexample for what good succession planning looks like in practice. Joseph Walker started the company in 1898. Today, his great-grandson Nicky Walker runs it as managing director, a position he assumed in 2022. Not surprisingly, the late Sir Jim Walker thus managed to create a deep succession pipeline. If not for his foresight, the company would no longer exist. Annual revenues at Walker’s Shortbread today top more than £200 million.
To do this Nicky Walker has adopted a “cousins consortium” model, involving cousins early in wider roles across the business. He highlighted the importance of this approach, stating, “Our succession plan essentially says that if you want to come into the business, there’s a role for you here.” He thinks this model gives younger family members the opportunity to pursue their own careers while seeking the broader company’s success. Walker continued, “Since the company’s still growing, there’s a huge career to be built and perfected right here.”
A recent survey in Canada from staffing agency Robert Half sheds light on just how critical the need for succession planning is. It uncovered a troubling fact—that more than 40% of business leaders still haven’t named a successor to take their place when they leave. Charlie Grubb, a senior managing director at Robert Half, emphasizes that building a succession plan is crucial for bridging current skills with future needs.
On the cusp of a major expansion, the fourth-generation butcher is looking to St James Town Steak and Chops’s future. He’s concerned with better-known brands like Dr Bronner’s and Walker’s Shortbread. Michelin is grooming his two sons, Noah and Alex, to take over the 54-year-old institution. He doesn’t want the business to go beyond the family. It’s advantageous for us to keep the business in the family,” said Kuehl.
The complexity of succession planning isn’t just a problem for small businesses—even the nation’s largest companies struggle with the issues. Rupert Murdoch’s recent decision to transfer control of his media empire to his oldest son, Lachlan, isn’t just bad news for American media. This ends a 5 year long succession struggle within the family.
Emanuel Bronner’s legacy is a cautionary tale, reminding us of what can happen when succession planning goes ignored. Once he departed the business, he dumped a large tax liability. It totalled $2m (£1.5m) with the Internal Revenue Service. This financial strain sometimes depicted reality of lacking long term planning and vision.
Nicky Walker encapsulates the sentiment felt by many involved in family businesses when he stated, “That owning and managing a generational family business is an unbelievable privilege. It’s wonderful to have the chance to create the building blocks of our own family. If so, we can never take that for granted.”
The journey of these family firms underscores a crucial lesson: proactive succession planning is vital for ensuring longevity and stability. As businesses navigate these transitions, they highlight the need for strategies that preserve family legacies and adapt to changing market dynamics.