Preparing the next generation to take over the family
business and make decisions as a team must start before the family’s
entrepreneurial leader is gone.
Business founders too often spend their entire careers making the difficult
decisions by themselves, doing the difficult work, and dictating orders to the next
generation. When the strong
leadership and decision-making abilities that made the founder’s business
successful at first go unchecked as the next generation comes along, the next generation
may not learn how to work through conflict, make decisions as a group, or do
the difficult work of leading the organization.
Recently, we heard from a second-generation
family business. The family had five siblings, their spouses, and several third
generation family members working in the business. As we talked with each family member, everyone expressed the
same sentiment: “Before Dad passed away, we never had conflict. Dad told us how it was and how it was
going to be.” When we spoke to
them, about two years after the father’s death, the second generation was at a
true stalemate. They were unable to make a decision as a group. They could not decide who should lead
the business. Every conversation
ended in unresolved conflict. Sad
to say, over the years following their father’s passing, mistrust, conflict,
and a decline of respect for each other forced the siblings to the only
decision upon which they could all agree: liquidate the business and go their
separate ways.
So how can an
entrepreneur and his/her family prepare for the future when Dad or Mom no
longer calls the shots?
1.
As a family, engage in open communication
to define why you want to be a business family.
2.
Be humble and respect your family members
for who they are and the knowledge, skills, and abilities they posses.
3.
Commit to truly listen to each other.
4.
Establish communication guidelines that
all family members can agree to follow when conflict creeps in or decisions
need to be made.
5.
Be a safe family member, including by
demonstrating openness to feedback, asking questions, and avoiding reactive
behavior.
6.
Create a participatory culture, such as getting
all family members in the game and seeking their opinion.
7.
Handle conflicts as they occur by walking
toward conflict, handling the “right” problem, and working to move toward
mutual agreement.
8.
Remember the counter intuitive
requirements. If you want to be heard, first be willing to listen. If you want
to be trusted, you must first be willing to show trust.
9.
Be willing to give grace and forgiveness.
10. Commit
to your family.
This can be the journey of a lifetime.
