Weekly Thoughts: March 19, 2018
"Overcoming Succession Roadblocks - Part Two
"Emotion, Rules, No Help"
A Price Waterhouse Cooper survey of 2017 found that 74% of entrepreneurial businesses employ family members. It also found that only 41% of the next generation will be running the company in 5 years. Roadblocks of Emotion, Lack of Rules, and not Seeking Assistance are major reasons.
I define Emotion as a strong feeling that can be based on fact or perception. In over 40 years of working with family businesses we have found that the greatest reason for family business failures is ignoring individual emotion. The failure of families to understand what each family member thinks about the business, feels about working with other family members and how each family member views themselves in 5 or 10 years, is a factor in family business failures. Some questions that should be discussed include:
  1. How do I view my working in the family business ? As a right or a privilege and why?
  2. Do I view myself as totally responsible for the success of the company or is that another person's task?
  3. Do I look forward to working with other family members each and everyday or is it a burden?
  4. Do I believe that our individual success is based on the total success of the family or could I do better without them?
  5. Do I see myself as contributing to the success of the family and business, no matter what role i am in, or do I need to be running it my way to ensure my secure future?
  6. As a family, have we addressed all those issues that have been left unspoken and unresolved or forgiven each one?
Without addressing the emotion, families that work together begin to be suspicious about the motives of other family members. This suspicion eventually leads to the breakup of relationships and usually the end of the business. Have these questions been answered in your family business?
The lack of family rules is another roadblock to family harmony and business success. A code of conduct that includes how family members need to act, and interact, with others inside and outside of the business. An understanding of what the family will and won't do for business must be a vital part of this code. The family must be on the same page in how each will set a positive example for the family by their example, words and actions. Without this consistency, there becomes a breakdown in direction that causes a breakdown in family relationships and company success.

Another roadblock is just plainly an over-inflated ego. This is identified when certain family members believe they can handle succession on their own. They direct how things will be done, who will play what role and how and when the transfer of ownership will take place. They rarely get input from the other involved generations, and they rarely give any thought to the emotions of the people whose lives they are dictating.

Succession Planning has to be inclusive. It has to be founded in the fact that the family succeeds only if all the family members understand the emotions of one another, support the rules that are in the best interest of the family and are open enough to get the right assistance for the good of the family and not just to fill the needs of one family member. How is your family doing?
Kwaiserism: "Family businesses fail for lack of a openness, direction and the right assistance."
View our book "Transforming Family businesses" by reading the first chapter on our web site  www.kwaiser.com .

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