The Future of Family Business is _______________
A few weeks ago I came across something that appeared to be a news item about family business, so naturally it caught my attention.
It turned out to be some survey results about family business issues, as well as a promo piece for an upcoming conference on the subject, in Australia, at which the survey results were to be released.
The headline read as follows:
Survey Finds Longevity of Multi-Generational
Family Businesses is Under Threat
It certainly succeeded in piquing my interest, even though the headline was a tad alarming for my taste.
Hold Off on the Drama, Please
If that alarmist headline wasn’t enough, here is the opening sentence of the “Newswire” piece:
Will multi-generational family businesses
be a thing of the past?
Oh brother. Can we hold off on some of the over-dramatic, end-of-the-world talk, please?
Family businesses have been around forever, and will continue to be one of the major forms of business ownership well into the future.
The Real Story
I’d like to relate some of my views on this subject, because the story isn’t “wrong” either. I just prefer to talk about in more realistic terms.
Building a successful business isn’t something that is easy to do. Keeping a business successful over a number of decades is not easy either.
People love to ring alarm bells about the “failure” to complete an inter-generational family business transition as if it should be a walk in the park.
Who Wants to Take Over?
The fact is, today, any offspring who may be qualified to take over the family business will likely have a whole host of other career opportunities to choose from.
If the qualified children choose something else to do with their lives, then you’re left with the less-qualified ones, and I don’t think I need to go into why that’s not exactly a great idea either, do I?
Hard Work and Complex Situations
Working in your family’s business can be fantastic, when things go well. There’s nothing like working together with the ones you love.
But, as great as things can be when things are heading in the right direction, when you hit a rough patch, things can take a big turn for the worse in a hurry.
The family relationships bring a whole lot more complexity to the situation, and that can be difficult to navigate.
The Right Ingredients
When someone we’ll call “Dad” builds a business and then decides it’s time to retire, what are the odds that the best person in the whole world to take over from him just happens to be one of his children?
The recipe for successful transitions calls for the right mix of ingredients if it’s going to be successful.
There needs to be at least one qualified AND interested successor. And don’t forget about the timing. You need someone to be “Ready, Willing, and Able”
(Please see: “Is ‘Ready, Willing and Able’ Enough?” for more on this.)
Better Options Abound
We always hear about how the world is getting smaller, and it’s never been truer than it is now.
Qualified successors have more options than ever before. Taking over the family business just doesn’t rise to the top of the list of career options for that many people.
Instill a Love of Business
One of my favourite ways of talking to families about this subject is for the parents to share their love of business with their kids.
I’m not talking specifically about Mom and Dad’s business, I’m talking about business in general.
If you can teach your kids how rewarding it can be to run your own business, and how to do it well, then maybe they can find something that THEY are passionate about, and you can help them start that kind of a venture.
I’m starting to hear a lot more about “Intrapreneurship”, which just happens to be a natural fit for family businesses that are faced with a situation where the rising generation wants to be in business for themselves, and not necessarily in the same business as their parents.
Please see: The Intrapreneurship Initiative for an innovative program put on by the Business Families Foundation.
They’re starting their third cohort in Montreal now, and will be launching in Toronto in 2018.
This just mght be THE best solution for many families. And hopefully we can all tone done the drama.