After years of hard work, you’ve built the family business into a great success and you take pride in meeting the challenges that each day brings.
At some point, though, the day arrives when it’s time to turn the reins over to the next generation.
That can be an exciting moment or an anxiety-ridden one, depending on what has gone on before to prepare for the momentous occasion.
“Laying the path to a successful family-business transition requires a bit of threading the needle,” says Henry Hutcheson, author of the book “Dirty Little Secrets of Family Business”
“On the one hand you don’t want to paint an overly rosy picture to the next generation. That could create a sense of entitlement and the false perception that running a business is easy and all you need to do is count the money and show up every now and then to check on things.”
At the same time, he says, if you put too much emphasis on the difficulties of running a business and the stresses that come with it, your sons and daughters might not clamor to be first in line to take over.
Ideally, it’s best to think ahead and start grooming the next generation long in advance, Hutcheson says. Give them summer jobs while they are in high school and college so they can start testing their abilities.
When they join the family business full time, find initiatives for them to work on that involve group dynamics. But also hand them individual projects where they hold sole responsibility for the results.
“It’s critical when you are selecting the next leader to realize that it’s not all about who will lead,” Hutcheson says. “It is also about ensuring that those who are not selected are in support of the decision and can work as a team with the new leader.”
Hutcheson says there are key ingredients to developing the right person to take over the family business.
Discussion Questions
• So, what are the dirty little secrets of family business?
• Are there solutions to these dirty secrets? What are they?
• How bad of a problem is nepotism?
• How many generations do multigenerational family businesses typically last?
• Is wishful thinking one of the biggest challenges in choosing a successor in a family business?
Henry Hutcheson is president of Family Business USA and specializes in helping family and privately held businesses successfully manage transition, maintain harmony, and improve operations. His newest book is “Dirty Little Secrets of Family Business: How to Successfully Navigate Family Business Conflict and Transition” (http://dirtylittlesecretsoffamilybusiness.com <http://dirtylittlesecretsoffamilybusiness.com> ). He’s also quoted in “Kids, Wealth, and Consequences” and “Sink or Swim: How Lessons from the Titanic Can Save Your Family Business.” Hutcheson grew up working for his family’s business, Olan Mills Portrait Studios. He studied psychology and has an MBA from Columbia Business School, and is a popular speaker at professional, university and corporate-sponsored events.
Source: News and Experts
