By Laurie Foster, Senior Consultant, Business Consulting Resources
Whether it’s leaving your four-year-old for the first time at day care, sending your teenager to college, or handing over the company reins to your kids, letting go during family transitions is difficult. Parents approach this differently, ranging from ripping the band-aid off to hanging on for dear life, and everywhere in between. Most common is the Yo-Yo approach, where control is given and then grabbed back in a panic for control! Even the highly successful family business transitions take an inordinate amount of time and are filled with challenges.
Parents have put their lives, their money, and their tender loving care into the business, often since inception. They cling on to control passionately and tightly manage the inherent risks. Therefore, transitions take time.
For the younger generation, the family transitions are often painstaking. There are so many aspects of the business that can be improved and updated. Opportunity is everywhere, and waiting for Dad to understand and agree on the smallest of modifications seems desperately slow.
For the current generation, the younger generation seems impatient and even impulsive at times. They don’t understand the big picture and resist proven methods of the past. Their ideas are interesting and often well received, but in small doses. The business needs a steady hand, and confidence in the younger generation’s ability to prioritize and manage the complexities is uncertain.
3 Keys to a Successful Family Transitions
To lower the drama and accelerate the time frame, three keys to successful family transitions include:
- Build Confidence: The younger generation must gain confidence in themselves and enable the older generation to gain confidence in them. This is not typically done through sweeping and radical change. Rather, this is through incremental changes and small successes that build confidence over time. Along the way, being a sponge to all the wisdom and knowledge of the older generation is essential to avoid making the same mistakes.
The older generation, in turn, must provide opportunities for the younger generation to explore and implement new initiatives and to innovate. Successes and failures are both common and welcome. In this “controlled” environment, the key is to maximize learning and to build confidence of both generations. - Keep Talking: The older generation and the younger generation look through different lenses. The key for both is to acknowledge and address the other’s perspectives and not to reject them. Each generation must have the courage to express their feelings, to ask questions, and to discuss alternatives with the other. The beauty of family business relationships is the inherent trust that comes with family. Difficult conversations can be had without ruining relationships.
- Make a Plan and Stick to It: While taking needed time is encouraged and adds tremendously to success, too much time can doom a family succession. A rolling succession plan that keeps getting “pushed out” will lose the credibility and confidence of all. Successful succession plans have specific initiatives, time frames, and deliverables that should be tracked and modified as needed along the way.
Family business transitions are incredibly rewarding, yet they can be tumultuous. Simple words of wisdom for both generations:
Older Gen: The next generation is not going to get it perfect (neither did you), and the business won’t fail as a result. Let them try, let them fail, and let them learn.
Next Gen: Cool your jets and don’t jump ship. The older gen can and will get there. There is an end in sight, even if it seems painfully distant.
What to do Next?
So, whether you are just starting to think about succession or already in the thick of it, now is the time to make your transition plan a priority. Business Consulting Resources has 44 years of helping businesses plan successfully for succession. If you want to begin your succession plan, then lets get in contact!