“Are you worried because your finance manager wants to retire soon?”
Does this sound familiar?
Your finance manager has been working for the business for ~40 years, recruited by Dad, or maybe even Grandad. You trust them implicitly with your money and they have been loyal to the family for decades. This person is your most trusted employee, your right-hand person; “the glue” to so many aspects of the business that extend way beyond finance.
How can you cope without them?
The answer
Succession of the family business includes the succession of key leadership roles that may not be held by family members. Finance arguably being one of the most critical roles. A suggested approach:
- Look after your highly valued finance manager through this journey
Acknowledge this is hard for them as well as yourself. Hence, they need to feel included and not side-lined. It’s quite possible they want to retire but feel like they can’t because they don’t want to leave you in the lurch.You need to find the right person to support and mentor them through this transition, so they feel valued. You want to give them the confidence that they can retire knowing that their role is in safe hands and controls are in place to protect the family’s assets.
- Knowledge transfer
You need to start to get ~40 years of business knowledge transferred to others. Encourage delegation. Focus on developing and mentoring other staff.Get processes documented.
- Reduce reliance on manual processes
Remove the reliance on manual processes unique to your current finance manager. Reduce risk of key person dependence through investing in process improvement, systemising and automating as much as possible.
- Recruit to the future needs of the business
Think future needs of the evolving business before recruiting a replacement. Do not simply replace like with like. The business has grown, technology has advanced, risks have increased. Plus, the expectation of the future generation of the finance function may be different from your own. Eg: A bookkeeper may have been fine 25 years ago. Now you need a qualified accountant.
By WA based Family Business Accredited Advisor
Debbie Millard
Director, dhm Coaching and Consulting
