Tradition entwines the history, heritage, and reputation for any business, and especially family business. It creates a familiar foundation for generations to establish themselves as economies, markets, and business environments. Tradition sets expectations and creates standards for customers and business owners alike. It also has the potential to differentiate your brand from the competition. When the community recognizes the way you do business as a family tradition, they have an idea of the level of service they can expect from you. With that said, sometimes tradition can be interpreted as restrictive and a hindrance. This is especially true if you or members of your family business are adverse to change. Tradition is not to be used as a reason or excuse to shun from incorporating innovations and new practices into your business. After all, these changes, difficult as they may seem, are what can give your company the cutting edge. There is no established timeframe in making a tradition. Tradition has a positive impact on family business and is essential for success for today and for the future. The transition from one generation to another can be very seamless and smooth. However it takes education, planning, openness and humility. As much as possible, do away with the prejudices you have of this next generation about what they can and cannot do. Get rid of family politics. Stop protecting Junior and doing things for him. Let Junior stand on his own two feet or leave the business. There is no shame in not being in the family business. Life is too short to not follow your passion. A message to Junior: Understand that you will change. You may not want to join the business now, but your passions, needs, desires and interests will change as you age. Mom and Dad, Grandpa, and Auntie may start getting smarter and have a better perspective as you get out in the world, work a job and learn the realities of life. Don’t burn your bridges and be unable/unwilling to come back and see the value of that family business. Also, following your passion doesn’t mean sitting on the beach strumming a guitar (nothing against beaches and guitars). It does mean that if you have a passion for medicine and the family business is a furniture store, follow that passion for medicine. Just because your passion was the business doesn’t mean you have to force your passion on everyone else. “Dad had started to transition out of the business. He was very organized and had a place for everything. The son, the new business owner and leader, had not inherited Dad’s particular gift of organization. He had piles on his desk and on the table. Dad on a few occasions during the transition went through and “cleaned up” the piles and threw out what he believed was unnecessary papers. As you can imagine, that created tension and frustration—on both sides. New rules had to be set up. There were new ways of doing things. It wasn’t better—just different—and Dad had to step back. He needed to be humble, understand new ways and allow the new regime to succeed or make mistakes on their own. It was a reality check for Dad who needed to realize he was no longer in control.” When a multigenerational family business continues to grow, the owners need to think about how they will manage the transition to the next generation of leadership. A husband and wife team started a business more than 30 years ago. At one point, they decided to move the business to another city, essentially starting all over again. That was more than 25 years ago, and since that time, their children have grown and also joined them in their endeavors. Currently they are experiencing the third generation, their grandchildren, becoming involved in the family business. These previous entrepreneurs, have become very successful business owners. They provide not only for their own family but also for the families of many employees. They have done so many things extraordinarily well. The fact that the family still enjoys each other’s company, likes to be together, and is encouraging the third generation to become involved is a statement to the nature of the business owners. The challenge for future sustainability is in truly turning over the reins of the business to the second generation. Times have changed, the needs of the family continue to change and what worked 20 years ago doesn’t work in the same way today. They recognize the challenges ahead and I believe are scared about how the transition will take place. One of the best ways for a family business to move to the next generation of leadership is to prepare for and organize the transition. The parents pick an heir apparent, lay out the organizational structure and spend the next five to 10 years grooming the new team and stepping out of the business a bit more each year. They let the kids start making decisions, knowing and understanding that mistakes will happen. After all, the parents made mistakes, too. They need to allow the kids to learn while providing a safety net of advice. Here are three challenges to family business transitions: Giving up Control. I hear you now, “I would be thrilled to give up control of the business.” Yes, you may actually believe it; until one of the new leaders makes a decision you don’t like. I see it all the time (and this happens in all businesses). Leaders give up control until they don’t like the decisions being made, then they step back in and take back control, and the resentment begins. Family members and employees that feel their actions are being second guessed feel the lack of trust in their abilities and often result in an unwillingness to try again. Fear of the Unknown. Children are often called a perfect blend of their parents, warts and all! The things one doesn’t really care for in the spouse manifest themselves in the kids. One is wild, the other is too conservative. One is visionary, the other wants things to be the same as they have always been. The end result is parents who are afraid everything they have worked toward for the last 30 plus years now has the potential of being destroyed; maybe even going out of business but for sure changing. This fear can hold the business back and stunt its potential. Fear can also be well-founded, however, if the parents feel the children do not have the skills to run a business then a plan must be put in place to enable them to learn to run the business or provide someone else to lead and move the business forward. Selecting someone other than a family member can often be a relief to the next generation who isn’t skilled or perhaps doesn’t want the responsibility of running the family business. And that is okay. Not everyone is gifted at risk taking and the responsibilities that come with business ownership. Their specific skills may be much greater in other areas where they can be high achievers. Failing to move forward: Business is good, life is busy and the succession plans are ignore, there's plenty of time to get back to it. The wills may be completed and the estate planning has been taken care of, but not much else in the business has been addressed, then disaster strikes. Why is it that death seems to be the one thing that everyone runs from? I won’t answer that here as many books have been written on this topic. The more we plan for the eventual results of life, the more we can relax and enjoy ourselves. Stop playing God and being afraid of death. Know that death will come and your job—yes, your JOB—is to make sure the next generation is adequately prepared. That means helping them learn how to make decisions. Let them disagree with you and then you provide them wise counsel, but let them make the final decision and live with the result. Let them learn how to fall, pick themselves up and fall all over again. Don't be a reactionary, let things run their course. Read John Maxwell’s Failing Forward; it will change your perspective on failure. If they can’t run the business while you are around, what is there to make you believe they will do a better job when you are dead? Give your family the best leadership of all and learn to let go. The most significant challenges with running a family business arise due to the relationships within families. With a regular job, you can leave work at the office with no worries about bringing the job home. However, when your co-workers live under the same roof, or are related to you, work and family issues can become intertwined. Your childhood relationships with siblings, parental interactions, self-image, generational thought processes all affect relationships in a family business. Some of these challenges include: There are lots of challenging issues when working in the family business such as divorce, health challenges, financial stability just to name a few. Rather than ignore the possibilities of such things happening, it’s best to create a scenario and then a contingency plan should something arise. Protect your business, but don’t forget to protect the family as well. Transition timing can be very stressful. How long will it take to transition parents out of the business? It seldom happens overnight (unless by death or divorce). Yet the multi-year transition can be enough to kill the business, the relationships or both. The challenges include: Customers. Do customers always want to work with Dad, since he gives them a long-term customer discount that Junior won’t? Do they like the way Mom runs the business and always ask for her, making it hard to establish a level of leadership? Boundaries. So who really is in charge? Daughter? Mom? Dad? All of the above? Who makes the decisions during the transition time? Create a plan that lays out the transition. Is this a six-month, 12-month or two-year plan? You may have to revise the plan at some point. Do not just go with the flow. It might work out, but there is a great chance that it might not. Hoping things will go well doesn’t work. Hoping no one will get their feelings hurt doesn’t happen. Not making a plan puts you on a path to having issues. “But we have always done it this way.” That statement has been heard around the world in businesses of all sizes. Family business owners do not have the corner on this market. It does take on a new twist when changes need to take place to keep up with the times, the skills of the next generation or just market changes. One of my favorite books is If It Ain’t Broke, Break It by Robert Kriegel and Louis Patler. Their concept is to examine conventional business wisdom and to break those rules in order to gain a competitive advantage. This book was written in the ’90s but much of it still applies today. When something is working, you need to analyze why it is working and what can be done to improve how it is working. In other words, what can be done to make things work better? Football for many years was solely a running game. Even after the forward pass was legalized, it remained a running game until a coach decided to have his team try throwing the ball. Everyone was shocked and critical. Yet, today football is very much a throwing game; just look at what quarterbacks get paid for their throwing ability!
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