Securing the future of the family business over the long haul remains a key goal cited by nearly all the respondents. Family businesses in Canada have a clear long-term vision and are willing to think in terms of generations, rather than years or even months. The percentage of respondents citing this as an important goal over the next five years is the same as it was two years ago, suggesting that there’s a challenge here—mid-range planning is required to help turn short-term ambition into long-term security.
Less than one-fifth of Canadian family businesses have developed a comprehensive succession plan that has been both documented and communicated. While this percentage has remained stable the past two years and seems to present a challenge for the future, it's actually slightly higher than the global average.
The good news is that some of these respondents, even without a complete succession plan, have the beginnings of a plan for a limited number of senior executives, so at least the work is underway.
56% of Canadian family businesses have a succession plan in place for at least some senior executives
More concerning is the fact that nearly half the respondents have no succession plans at all, and there’s definitely room for improvement in this regard. It's conceivable that a lack of talent is affecting the development of succession plans in some cases. To address this talent issue, some firms are starting to bring in an external CEO. While this is not without challenges, there are numerous advantages. Besides getting an external CEO, succession planning falls under strategic planning, and is vital to achieving long-term ambitions and leaving a lasting legacy for Canadian family businesses—addressing the “missing middle”.
Compared with 2014, Canadian family businesses are now more likely to say they will pass on ownership of the business to the next generation but will bring professional management in (27% compared with 11% in 2014)
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