07 Jun Keeping it in the Family: Transitioning the Family Business & Flourishing in the Process
The business of family business is a complex environment by nature. The mix of family, business and ownership systems often have competing tensions. Adding to this complexity is the planning for transition, succession, and continuity planning.
Believe it or not, there are over 5 million family businesses in the US, and all of them will get to experience this joyous occasion at one point or another.
Transitioning your family business is a process, not a destination. Communication is at the heart of both the failure and success of the transition. Understanding the shared commitments, challenges, and concerns is required to determine the best process to start succession planning.
Let’s talk about some simple ways to make the transition as smooth as possible!
Communicating About Transitioning the Family Business to the Next Generation
The process of passing down the family business should begin as early as possible. Start communicating both early and often with everyone involved, create a long-term plan, and make sure everybody is on board.
Jaime Mejía identifies 8 simple steps for transitioning the family business. Within the 3 systems—‘Business,’ ‘Family,’ and ‘Ownership,’ you have seven different positions. Where you stand on an issue depends on where you sit in each of the systems. Family and business flourish when the systems are united and aligned. The only way to achieve unity and alignment is through communication and governance.
Family history can impact the transition and future success of a family business. Family members often have very different experiences and perspectives of their family life, both past and present. While natural, the brain predicts the future based on history, we tend to carry forward perceived negative events through these past experiences. This creates a problem of being stuck with past hurt and resentments alive in the present, making a predictable trajectory. Family patterns, labels and the predictable trajectory result in poor listening, misunderstandings, and lack of appreciation for each other.
Unity demands discipline, trust, and a certain kind of communication to lead and navigate the inherent complexities of transition successfully.
Sometimes, family members are not directly involved in the family business but remain concerned with management and outcomes. Keep them in the loop, if applicable, and ask everyone involved for their input early on.
Creating a Plan
What we talk about and how we talk about it determines what gets done and does not get done. The ability to talk through tough issues productively is a key success factor in leadership, business, love, family and life itself. You can’t make a plan for several people all by yourself without their consent. Ensure they’re both aware and on board with the steps in the plan, including the timeline.
Missing conversations and resentments from the past can be barriers to creating a “future” that fulfills the needs of the family, both the outgoing and incoming generation, and the enterprise(s). Having a harmonious and healthy family requires resolution about family history. Creating a structure and dealing with the unspoken history leads to healing, restoration, and forgiveness.
Learning together is another way to build trust, strengthen each individual and the systems. Using a common language with the same tools enables expansion in communication and leadership. With the shift in communication, a family business can have discussions to prepare the structures for the next generation to move into leadership roles. Create new roles for the existing family business leaders to express passion and contribute to the ongoing success of family and business.
Don’t Do It Alone
While the business will always stay in the family, that doesn’t mean you can’t get help from the outside. Contact an expert consulting firm for family businesses that can help you with transferring power in a family business.
Get Started Today
Once you are ready to start transitioning the family business to the next generation, it won’t be all on you. Everybody will have a role to play in this transition, and gathering their input can prove invaluable to the successful move. It is exciting preparing for retirement and this new business moves, so don’t get senioritis too soon and enjoy the rest of your career! You earned it.
Before you get started, learn more about how to have difficult conversations successfully to prepare yourself for the challenges ahead!