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Successful Succession: What businesses can learn from Old Trafford

By Niall MacKenzie - Posted on 4 June 2013

Dr Niall MacKenzie, lecturer in family business at Strathclyde Business School’s Hunter Centre for Entrepreneurship and Graham Smith MBA, from Strathclyde’s Centre for Lifelong Learning, discuss what we can learn from recent changes at Manchester United…

Changes at the helm of one of the world’s largest sporting brands have thrust the issue of succession into the international media spotlight.

Saturday saw Sir Alex Ferguson’s time at Manchester United come to an end, as he officially handed over the reins to David Moyes, but succession isn't an issue reserved for football clubs. For many businesses difficult and sometimes unplanned transitions can be critical periods which determine future success, and indeed survival.

This transition isn’t just about picking the successor and letting them get on with it. In the case of family businesses in particular, power doesn’t necessarily have to be automatically handed-down to the eldest child. After all, due to lack of skills, or interest, they might not be the best candidate to lead the company.

Succession has to be well thought-out, planned for, and managed, but this complex process is one many businesses have little experience of and often fail to understand. What’s more, in the case of family businesses, the formal transition of responsibilities and liabilities, assets and financial controls, can be even further complicated by emotions and relationships.

One thing all businesses can learn from the recent transition at Manchester United is the importance of communication.

As with any change, explaining what’s happening to all stakeholders, especially employees, is essential. When Alex Ferguson took the decision to stand down, Manchester United ensured the process occurred as seamlessly as possible, by announcing David Moyes’ succession weeks ahead of the official handover.

Sir Alex Ferguson was also on hand to bestow legitimacy on Moyes, endorsing him as the right successor and encouraging support among the team’s employees to promote continuity. He also pledged not to meddle in the team’s affairs or maintain the leader-employee relationship by insisting the players only refer to the incoming manager as ‘boss’.

As a result, Manchester United was able to avoid a classic succession pitfall, ‘Founder’s Syndrome’, which occurs when previous leaders fail to adequately detach themselves from their former business.

Business succession, whether in family or non-family firms, has the potential to make or break a company. Managed well, it can help a company sustain its competitive advantage for years to come.  Managed badly and it has the potential to see a business unravel in a very short space of time.

Have you experienced succession? Do you have any thoughts on how to ensure its success? Let us know in the comments below:

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