Hubler For Business Families
   

Changing the Generations in a Family Owned Business

Ten ideas to successfully prepare for a changing of the guard.
"The kids are taking over the company." That thought can strike fear in the hearts of non-family managers and family members alike. It is definite, yet filled with ambiguity; stimulating and intimidating at the same time. Here is my list of ten important things younger generation adult children can do to smooth their transition into leadership in the family-owned business so that everyone involved feels positive and vital.
  1. Regularly express your appreciation to Father and Mother for the opportunity they created for you. Your expressed thanks are essential for a successful family business relationship. Parents in their sixties and seventies seek validation for their business accomplishments. When appreciation is not expressed, parents often feel that the children are ungrateful.
  2. Nurture a reciprocal commitment to each other's success. This is important between parent and child as well with siblings. Without this expressed, demonstrated mutuality, enormous tension can arise. With this commitment the family works as a team in their business.
  3. Establish agreed-upon ground rules for how you will become part of the business. Use business sources and your parent's experience to establish how you will enter, train, be accountable, develop leadership, use mentoring, be compensated and work with siblings, generations and non-family managers. Pre-defined ground rules help prevent arguments and can save enormous amounts of time. The younger generation should take initiative to work with their parents and see that these rules are defined.
  4. Formalize all agreements to prevent further misunderstandings. Hearing this, many family members will say, "We don't need to do that because we all love and trust each other." That's exactly why you need to do it. Love and trust is no guard against misunderstanding. I have found that the family-owned business that formalizes their ground rules, creates shareholder agreements and develops family participation plans tends to be more successful with less hurt feelings.
  5. Define and adopt a Common Family Vision. This is a written understanding created out of the family's values on what you, your siblings, parents and all family members want to see perpetuated in the company and that unites your family. It envisions what you are and aspire to as a family.
  6. As part of your family vision, strive for good communication and ways to manage differences. In any family, differences are normal, but many business families shy from discussing them because they fear it will create family disunity. I often hear clients say "We don't want to upset our family relationship. We don't want to ruin family celebrations, holidays, or events." Unfortunately, the reverse comes true: not talking about issues produces the family disunity you are trying to avoid. Regularly discuss and manage differences before they grow into problems.
  7. Be willing to lead in organizing family meetings. Family-owned business meetings can be: 1) shareholder meetings where only shareholders attend; 2) employee meetings where only company-employed family members attend; and 3) family meetings where the entire family is invited to attend. Use this third place to work out the overlap between family and business and how it is managed (see diagram below).
    image of overlap between family and business
  8. Actively help to formalize plans necessary for success. While the senior generation is responsible for many of these plans, the younger generation helps by being actively involved. There are many different plans to formulate. First, develop a strategic business plan that draws out what is often only in the entrepreneur's head. Get those insights on paper. Second, when the time is right, have the family develop an ownership and estate plan and a management and leadership plan. Third, create a plan for how to be a family beyond the business. In my experience, business and financial differences will erode family relationships unless the family knows how to come together to preserve those relationships.
  9. Build the emotional equity of your family as vigorously as you build the business equity. You read stories about couples who divorce yet keep their business relationships or siblings who squabble over business issues that ruin their family ties. To build emotional equity, celebrate and maintain family celebrations and traditions. These precious moments and events are the glue that holds a people together as a family and not just as a business.
  10. Have fun with each other out of the office. Enjoy work and play. Meet for lunch or breakfast a few times each month. Share dinner occasionally. I have clients where the father and sons and a father and daughter get away at least once a year to golf, ski, or go to the theater. Time spent together enjoying each other away from the business builds emotional equity.
You can't accomplish this list in a few months, but you can select priorities to encourage and involve others in your family. Follow through on these ten ideas and I confidently guarantee smooth sailing when it's time for you to take the reins of your family business.

We can help your family owned business adapt to changing generations we can help with our exclusive Vision for Successtm. Contact us today by Email, call us at 612.375.0640, or fill out our contact form.

If you enjoyed this article please consider leaving a comment below, sharing it and/or subscribing to have future articles delivered to your RSS feed reader.
blog comments powered by Disqus
     
click edit icon to configure CONTENT-SMICONS element

Management and LeadershipWhen Clients Step Down from the Business They Started - Part Two
As couples get older and start to consider retirement, many realize how little they understand about each other's dreams and values for the next stage in life. Read More
When Clients Step Down from the Business They Started - Part One
The decision to step down and retire is one of the hardest a family business entrepreneur ever makes. When that time comes, entrepreneurs don’t have to retire and leave their companies. Instead, they must change their job description. Read More
Formalize the Love in Successful Family Businesses - Part Two
It's not unusual for family businesses to put off dealing with issues as a way to maintain family unity. Unfortunately, that approach usually backfires, as we saw in this case study....
 Read More
Formalize the Love in Successful Family Businesses - Part One
How structure and shared vision can prevent family rifts from undermining a thriving enterprise Read More
The Power of Gratitude - Part Two
In Part 1 of this article series, we discussed how lack of gratitude is the single biggest obstacle to succession planning. Here, we'll explore how the philosophy of gratitude can help family businesses and the advisors who serve them. Read More
The Business of Gratitute - Part One
Why is it so important to learn gratitude, not just voice it? Because at that level it is a business asset. In my experience, the single most troubling obstacle in family-owned businesses is that appreciation, recognition and love are so rarely expressed.  Read More
The Last Challenge of Entrepreneurship - Part 2
Part 2 - Concluding a series focusing on succession planning Read More
The Last Challenge of Entrepreneurship
Part 1 of a two-part series focusing on succession planning Read More
Family Businesses - The Trust Paradox - Part 2
How families create formality and structure in their businesses as a way to promote trust in the family as well as in the business. Read More
Family Businesses - The Trust Paradox - Part 1
Trust is provocative, paradoxical and implies risk Read More
The Trust Paradox of Family Businesses
Trust is the central component to the development of a family firm's social capital according to Pearson and Carr's "The central role of trust in family firm social capital". Their work raises the questions of what trust is and how to sustain it as the family business evolves. Over the past 30 years I have worked with family businesses in the area of transitions, succession planning, and managing what I describe as emotional breakdowns of trust in either business or family relationships. As a result, I believe building trust in the family and in the structure of the business are mutually beneficial to family harmony and a successful family business. Read More
Family Business Consultants as Leaders
Working with family businesses as a consultant is one of the most awesome responsibilities I can imagine. It incorporates managing family issues and concerns as well as business issues and concerns and the interrelationship between the two. The impact of choices made by the consultant can have far-reaching effects for both family and business that can impact generations of family members. Read More
Do Family and Business Meet or Collide?
The way we see it, the overlap between family and business is an organizational problem, but people within the family business experience it as an interpersonal issue. That's why family members commonly blame each other for the situation. Read More
When the Business of Your Family is Business
The defining qualities of a business contrast starkly with those of the family. While a family is nurturing, a business must be productive. It values competency and candor in order to embrace change and create success. Of course, the skills and sensibilities of business can play a positive role in your family. Business discipline and financial savvy, for instance, positively influence families and their success.
 Read More
Is it a Family-Run Business or Vice-Versa?
The family-run business faces unique obstacles. Business differences can tear apart families because the family and business have different (even opposing) goals. While family is protective and loyal with strong emotional ties, these positive qualities can lead to resisting or minimizing change in a business setting. Read More
Understanding Both Sides of Family Business Management
To help you understand the issues of family business management, we've developed a working model of the family business. It consists of two intersecting circles. The first represents your family; the second, your business. Read More
Family Members Entering the Business Checklist
Family businesses are all about the family, yet major heartaches can occur when next generation adult children enter the business. Read More
Changing the Generations in a Family Owned Business
Here is my list of ten important things younger generation adult children can do to smooth their transition into leadership in the family-owned business so that everyone involved feels positive and vital. Read More
Learn More and Get FREE Resources



Now Available:



Cornerstone of Hubler for Business Families:

The Soul of Family Business


SCHEDULE YOUR FREE ORIENTATION MEETING.

Take this risk-free first step in ensuring the continued success of your family business now. There is no charge for the orientation meeting other than out-of-pocket expenses for travel. 

TOM HUBLER WILL GIVE YOU A FREE ORIENTATION.

Does your family business need help with succession planning, conflict resolution, management or other issues? If so, we'll arrange a one-on-one orientation meeting with you and Tom Hubler to help you explore the possibilities of working with us. If you choose, your family and business associates can also attend. Here, in a relaxed environment, you can talk about:

- Key family business issues
- Plans necessary for the success of your family-owned business
- Possibilities and expectations
- Terms of the relationship
©All Rights Reserved | Hubler for Business Families - America's preeminent family business consultants
Ownership Planning | Management and Leadership | Business Planning | Family Planning
Contact | Site Map