How can I break it to my son that he isn’t up to the top job at our house building company?

Straight-talking, common sense from the front line of management

Q We have a successful house building business started by my late father 55 years ago, with a strong workforce of 45 loyal people and ambitious plans to grow within our specialist part of the market. But I’m rapidly approaching 70 and wish to take a back seat. My son, who is our contracts manager, does a good job, but will never make a leader – he has no vision and lacks people skills. He and his wife will be devastated if he doesn’t succeed me, and my wife simply doesn’t understand why our son isn’t being put in charge. Is there a solution to my awful dilemma?

A You raise a common problem that can have a significant impact on our country’s financial prospects. Big public companies dominate the headlines, but every household, office, factory and warehouse depends on the support of several small private companies that supply a wide range of essential goods and services. It is in the national interest that we should help family businesses survive and flourish.

Sons, daughters and grandchildren ought to be encouraged to join your business, but only those with exceptional talent should be offered the top job. Your 45 loyal colleagues deserve an excellent leader. Your choice of successor will influence the company’s future success and determine the size of your family fortune.

So stand up to your wife and never give in to your son, you must hand over to a capable new leader who can turn your future plans into reality. Your experience isn’t unusual, the third generation can often cause trouble in the boardroom and may be much better at spending money than making a profit. Hence the phrase “clogs to clogs in three generations”.

But some exceptional families have the knack of developing a new talented team every 30 years, while still keeping control of the company. It can be done – hats off to my friend John Lea, whose highly successful cereal supplier Morning Foods celebrates its 350th year as a family business in 2025. The firm is now run by John’s sons, James and Edward, the 15th generation.

You could solve your dilemma by selling the business. With a good track record and ideas in the pipeline you should attract a keen purchaser and receive enough money to fund a comfortable retirement.

But new owners are unlikely to share the values of your family business or have the same sense of duty to long-serving colleagues. So a sale may not be in the interests of your loyal employees, including your son, and I’m pretty sure your father would have expected you to keep your business in the family. If possible, appoint your successor from within the business. The rapid approach of your 70th birthday should hardly have come as a surprise, so hopefully you have identified an internal super star and widened their experience in preparation for the top seat.

But if you have to make an outside appointment, pick someone whose personality suits the business. Take time to help them understand your company culture and explain how to gain the respect of loyal colleagues through kindness and common sense.

Once your successor has been appointed your career will almost be over, but you will still have a vital job to do. You must remain as company chairman for at least two more years so that you can be on hand to mentor your successor and monitor performance on behalf of the family.

The new chief executive should be given the freedom to use their initiative but, if you have picked the right person, they will have the sense to learn from your lifetime’s knowledge of the company.

If your successor works out well, you will have secured the future of the business for a few more years, but I still haven’t found a solution to that domestic dilemma. Your son and daughter-in-law will always bear a grudge, but you don’t have to live with them. Your wife, however, your constant companion, may never admit she was wrong (wives seldom do) but probably already knows that your son isn’t equipped for the chief executive role and should stick to contract management.