Why do business families delay the inevitable: Succession planning?

Succession planning is often seen as one of those essential tasks that everyone agrees is important, but few approach with any urgency. It’s the proverbial elephant in the room—acknowledged, but seldom acted upon until a sense of immediacy or crisis forces the conversation. 

In the context of Indian family businesses, this delay can be attributed to deeper human tendencies and a complex web of emotions that tie individuals to their roles and responsibilities.

Take the case of, say, an industrialist who at 70-plus continues to spearhead his business. His achievements would be many, and his identity inseparable from the company he built from the ground up. 

He recognises the inevitability of succession, yet the conversations around it remain vague, informal and constantly deferred. There’s always something more pressing, more immediate, to deal with. A new acquisition, an expansion, a regulatory

shift—running the business demands all his attention, and succession planning gets quietly pushed down the priority list.

It is a pattern that repeats itself in many organizations, large or small. After all, discussing succession feels like admitting one’s mortality—a notion that even the most pragmatic of leaders subconsciously avoid.

Human psychology plays a significant role here. As individuals, we tend to focus on what’s urgent rather than what’s important. Succession planning, by its very nature, is about the future. It requires thinking beyond the immediate horizon and planning for a time when one might no longer be at the helm. 

For many leaders, their sense of self is often intertwined with the business, and stepping back or relinquishing control can feel like losing part of their identity. It is deeply personal.

Moreover, there is the question of trust—in the next generation, in the system and in the process itself. Succession planning demands that leaders not only identify potential successors, but also prepare them to take on the mantle. 

This preparation is more than just imparting technical knowledge or strategic insights; it involves a transfer of values, vision and leadership style. 

For many, this is an intimidating task, especially if they have doubts about whether the next generation shares the same commitment or has the competence to carry the business forward. The fear of getting it wrong often leads to inaction.

Families are also complicated ecosystems. Different generations may have contrasting views on the future of the business, their roles within it and their personal aspirations. Candid conversations about succession can sometimes bring to the surface long-buried tensions or unresolved conflicts. 

To avoid rocking the boat, it’s often easier to postpone these discussions until absolutely necessary. But when succession is handled under pressure, decisions may be rushed, emotional and fraught with conflict, ultimately jeopardizing the very harmony they were meant to preserve.

Indian history, both ancient and modern, is replete with examples where poorly managed successions led to chaos, infighting and, at times, the collapse of entire dynasties. Yet, the lessons are seldom applied to the corporate world. 

We assume that with modern governance structures and legal frameworks in place, the process will unfold smoothly when the time comes.

But corporate governance and legal frameworks are no substitutes for open and honest conversations within business families and boards. A well-documented plan is important, but so is a shared understanding between generations about the future of the business and each individual’s role in it.

Interestingly, the pressure to act on succession planning often comes not from within, but from external forces like investors, regulators or market dynamics. A crisis—such as the sudden illness of a leader, an unexpected financial downturn or regulatory scrutiny—can push the issue to the forefront. 

In such cases, lack of preparedness becomes glaringly evident, and the consequences can be severe. Businesses that have not thought through their succession plans may face leadership vacuums, instability and a loss of confidence among stakeholders.

It’s also worth noting that succession planning is not a one-time event. It is an ongoing process that requires regular review and adjustment. As businesses grow and evolve, so too must their leadership structure.

Individuals who were once seen as natural successors may no longer be the best fit, and new leaders may emerge. A dynamic approach to succession planning allows for flexibility and resilience, ensuring that the business remains robust in the face of changing circumstances.

The irony, of course, is that the very qualities that make a leader successful—drive, ambition and a relentless focus on the here and now—are often the same qualities that prevent them from engaging with succession planning.

The urgency of daily operations overshadows the long-term need for continuity.

At its core, succession planning is about creating a legacy that lasts beyond the individual. It is about recognizing that no one can lead forever and that the true measure of leadership lies in how well one prepares for the future. Families, businesses, markets and societies are all strengthened when succession is handled with care, transparency and foresight.

The true measure of successful succession planning lies not in the seamless transfer of titles, but in the enduring harmony, stability and growth of the business and family across generations. 

It is judged by how well future leaders are prepared, values are upheld and long-term vision is preserved, ensuring the legacy thrives beyond the founder.