As an advisor to family businesses I have the opportunity to work with a wide range of businesses and business owners on the issues they are facing. Just this week I had opportunity to reflect on a particular matter relating to the transfer of a family business from one generation to the next.
It related to a successful family business that was still heavily reliant on the knowledge and experience of the founder. Strong willed, hard-working, determined, demanding and sometimes unreasonable are just some of the words used to describe the founder. He won and lost employees, customers and business partners as quickly as he found them, worked very much from instinct and throughout his time in business had not seen the need to establish the systems it should have to make a generational transfer really successful.
While reviewing the matter I had opportunity to reflect on my own experiences in consulting with this family and a number of discussions with key stakeholders to the process. Looking back, one thing became very clear – a large number of the traits of the father are carried by the son. Whilst some of these characteristics are extremely valuable, a number of them may cause difficulties in the modern business environment.
The old saying, “An apple doesn’t fall far from the tree”, sprung to mind, meaning that children, in many ways, take after their parents. This has the potential to cause problems, especially in family businesses.
Through copying and mimicking, children learn their behaviours from an early age, right into their teenage years. It is often not until late teens/early twenties that children start to develop their own awareness and political views and it maybe not until their 30’s that they really become focussed on their own pathway and decisions.
This means that the next generation has 3 decades of direct influence from parents in so many areas of business including
- Work ethic
- Structure and systems
- Time management and organisation
- How to manage people (employees, customers and suppliers)
- Finance and so on
Given that, it is really important to consider the impact that we as business owners have on the next generation. Are we teaching them the things they need to be successful in the future? Are we giving them opportunities to try new things? Are we letting them fail so that they can improve? Are we giving them the personal and business tools to succeed? These are all valid questions that need to be asked and asked often.
Some families handle this is extremely well, and as a result they thrive. Others may need help.
Ensure that your business will prosper in the future. If you need help with succession planning, get in touch with our experts today.