Planning Leadership Succession for Your Wine Business

business operations, yet were uncertain how to do so. Since the founders continued to live at the winery and as not all of their children showed interest in working in the family business, the founders were deeply concerned about how to step back and still keep pace with the growing business in order to sustain their family legacy.

A discovery process was initiated, and comprised of structured interviews with family and business managers, as well as an assessment. The consultants used a Family Enterprise Assessment Tool (FEAT) to obtain anonymous perspectives from all family members, whether they worked in the family business or not.3 The compiled data, in tandem with industry best practices, helped the consultants and the owners craft a plan for sustainable succession. Highlights from the assessment of individual respondents are plotted as line graphs shown in FIGURE 1 and it can be inferred that direction and development along with continuity and succession appeared to be key opportunity areas.

perhaps the family could have developed a vision that made the business more competitive and positioned the family for the desired succession.

Succession Planning For Block Family Winery2

Block Family Winery, a small family-owned business located in the North Coast region of California, built a reputation for producing award-winning wines and providing high touch, personable experiences for customers. However, the founding owners reached an age at which they wanted to relinquish day-to-day

The compiled data, in tandem with industry best practices, were used to craft a plan for sustainable succession, which included shifting the founders to strategic roles under a formalized governance structure, preparing the next generation for leadership and initiating a transition plan to meet business and legacy needs.

Learned Lessons

These two case vignettes illustrate divergent approaches to the leadership skills needed for a sustainable succession plan. As seen in the first case vignette, the potential for sibling rivalry can also pose a major challenge to succession (managing conflict). The second case vignette demonstrates the importance of proactive planning and formalizing a governance structure for the family and business to ensure successful transition to next generation leadership. In both cases, engaging external experts to manage potential generational conflicts that may have their roots in nonfamily business environments and may increase the probability of a successful succession. Without the wholehearted commitment of the incumbent (and the family) to the process, it may be better to plan to sell the business than to plan for the transfer of leadership to the next generation. Based upon a synthesis of the results from this investigation, it is apparent that wine business leaders who are planning succession should:

1. Start with an organization chart. Determine where the missing pieces of the organizational puzzle are first.

2. Make diversity, equality, and inclusivity part of the plan. An effective succession process should involve inclusiveness. Bring non-family staff into the decision-making process to signal to non0-family members that they are valued contributors to your company’s success.

3. Learn up! A workshop in a classroom setting can legitimize the free exchange of ideas without judgment, promote expression of aspirations, stimulate excitement and commitment by introducing alternative visions of the family enterprise that may not only be more engaging to the next generation, but also soften any natural resistance to change.

Based on our findings wine leaders should begin to put in place some of the above “strategic guardrails” within which important traditions are preserved yet innovation can thrive, and embed those practices in the core values of the business. Successive boards of directors and executive teams will be responsible for approving and implementing these strategies. The upcoming generations surely need to be aware of what is worth preserving from the past and what is worth changing in the future so that a wine business can stand the test of time.

WBM

The “Succession Planning for Rich Family Winery” case is based on actual events even though the actual names of the organization and its members have been disguised at the company’s request. This case was researched and written by Tim Wallace. Used by permission from the author.

The “Succession Planning for Block Family Winery” case is based on actual events even though the name of the organization and its members have been disguised at the company’s request. This case was researched and written by Caroline Coleman Bailey. Used by permission from the author.

FEAT® was created to provide family-owned business with a snapshot of the current state of family and business enterprise dynamics. FEAT is the first virtual researchbased assessment tool specifically designed to anonymously gather and assess family stakeholder perspectives in a simple and safe environment. Developed by Dennis T. Jaffe, PhD and Caroline Coleman Bailey, FEAT is used as a foundation for family governance and legacy planning.

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