What is the biggest roadblock that can impact transition in a family business?
One of the competitive advantages of a family business is a clear and strong sense of shared purpose and loyalty. Unfortunately, in my experience, this competitive advantage is not enough to overcome the biggest roadblock to successful transition in family business, which is communication (or lack thereof) between generations. This is because all too often, the first generation (i.e., the parents) may shy away from open and honest communication with all interested parties and instead prefer to put blind faith in the next generation by handing over the proverbial keys to one or more of them without proper transition planning.
What should business families be doing right now to improve their chance of a successful transition?
While business families routinely engage professionals such as lawyers and accountants to assist with the business aspects of a transition, engaging with family members is equally important. When developing a succession plan, you want to ‘plan with and not plan for’ the next generation. Professionals that specialize in family dynamics can be relied on to facilitate important conversations, bringing independence and an outside perspective. Planning should begin early and shouldn’t be seen as a one-off event. It can also be extremely helpful to learn from the experiences of other families that have gone through a successful transition.
What advice would you give to the next generation to help them transition into leadership and/or ownership?
Your last name gets you in the door. You must earn the right to lead successfully and walk through the door. Jump in, get involved, show interest in learning everything about the family business. If you don’t have a mentor in your industry outside of a family member, get one. If you have time to work outside of your family business, do it. Preferably in the same industry. The important point here is to gain skill sets you can apply back in your family business. Make a name for yourself within your family business as a hard worker and someone who cares.
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