Three experts highlight best practices for developing ownership in the next generation
Vice-president, wealth strategist, Richardson GMP Private Family Office
How do shared values impact business success? And how do you help families infuse their shared family values into the business?
Family values are the foundation of strong, successful family businesses and help provide continued commitment and drive for family members. Mission and vision statements can build trust and have a strong impact on employees and customers, but they need to be implemented in everything the business does. To ensure this focus, we hold regular family meetings. We devote time in the first few meetings to a discussion of individual and shared values, family history, business history and then move to articulation of a shared vision and mission for the family and the business. These are very important guideposts for helping the family decide on business direction and the many other decisions they need to make. This also forms part of the culture of the business that impacts employees and family alike.
Partner, Succession and Estate Planning, Grant Thornton LLP
What is your advice on when and how to bring the next generation into a family business and promote them to leadership roles?
I’m a big proponent of making the employment and promotion of family members within the family business merit-based. Best practices for employing family members include requiring them to complete some form of post-secondary education, have meaningful employment success outside of the family business and be properly vetted by individuals in leadership roles who are not family members. Such a formalized process has a number of benefits, enabling the individual to gain outside experience, bring new and informed perspectives to the role and, perhaps most importantly, be able to decide whether the family business is the most appropriate career option. It would be detrimental to the business and morale of non-family team members as well as contrary to the development needs of the family members if they were promoted without merit to leadership roles beyond their capabilities.
Vice president, head of Wealth Planning Canada, BMO Private Wealth
How do you foster balancing the preparation of the next generation to succeed in a family business with allowing them to place their own stamp on the business?
If both generations are able to communicate with, trust and respect each other, it will be easier to establish clarity about the role and navigate the obstacles that will inevitably occur through a transition. For founders, be willing to let the next generation make changes, and understand there will be challenges as they find their way. Consider starting small, letting them run with projects with authority and autonomy, and gradually increase responsibilities. Through consistent mentoring and assessment of knowledge and skill gaps, owners will be better able to determine when the next generation is ready to lead and when they may let go.
Produced by Randall Anthony Communications. The Globe’s editorial department was not involved in its creation.