Keeping It in the Family: How to Pass the Torch to the Next Generation
If you’ve ever watched Game of Thrones, there’s one thing you know for sure: handing the reins of leadership from one generation to the next is never an easy task. As consultants for some of the world’s largest and most successful companies, we can attest to the fact that businesses and dynasties have this much in common. And when family is involved, it can be even more complicated and emotionally charged.
To be clear, some of our best and most rewarding clients are family businesses. When they run smoothly, it creates a sense of community and ownership that you don’t often see in publicly-held companies. Everyone works toward a common goal, and the success of the company benefits all. But what happens when a family-run operation veers off track? Setting things straight can be particularly challenging because family dynamics are complex and personal relationships are at stake.
In addition to the regular difficulties that affect many businesses—from misalignment of objectives across the organization to lack of long-term vision to stalled growth—family businesses have additional considerations, particularly when existing leadership is finally ready to pass the torch to the children. An event that should be filled with excitement and promise can instead be marred by any number of different problems.
If any of these situations below sound familiar, you should know that you are not alone. But it might be time to take a proactive approach to the family business!
- The Meddler. Dad has finally decided to step back from the front lines and let his progeny take over the business. But instead of removing himself, he continually finds reasons to come back and save the day. His intentions are good, but his actions can undermine the leadership transition. Dad’s interventions may be motivated by a desire to protect his children from failure, but his meddling will unintentionally ensure that the next generation will struggle to earn its true authority over the business.
- Sibling Rivalry. Sometimes, multiple “kids in the biz” can create a whole host of problems. It may be that an older brother in charge of sales secures deals right and left, wielding all the charisma of a good salesman. But his brother, who oversees operations, knows that the business can’t deliver on them. He feels as if he is constantly cleaning up his brother’s mess. In this case, how does each sibling exercise his or her strengths while working together toward a common goal?
- Different Strokes. What happens when the apple falls far from the tree? For years, dad has looked forward to retiring from the family business. But what happens when his son isn’t ready for this type of leadership role? Or perhaps isn’t even interested in it? These situations are particularly difficult because sometimes no amount of outside help can turn a person who doesn’t want to be a leader into one. In the meantime, resentment can build throughout the organization where strong individuals from other areas of the business feel limited by weak leadership at the top.
While these challenges may not be resolved overnight, there are important steps you can take right now to address these pain points. One of the most useful tools for our clients who own family businesses is a company-wide growth plan. This type of plan delivers significant value when undergoing a transition in leadership from one generation to the next. By establishing a bold vision for the future and aligning every leader in the company around a common growth goal and growth strategies, the company-wide growth plan helps to set clear expectations for the succession of the business. Through leadership training, increased accountability, and detailed understanding of all parts of the business, the next generation can step up and assume the important role that has been left for them. Building this type of cohesion is no easy task, but it is absolutely vital to the success of the company. We take pride in guiding our clients through this process, especially when working with family leadership teams.
So where do you begin? By stepping back, taking an honest look at the business, and mapping out your plan to pass the torch. Use our Journey Map below to guide you through the process. Start by working your way around the frame, evaluating the current- and future-state of the company—Where are you today? Where do you want to be tomorrow? Then move into the center of the map, and begin to strategize about how to achieve the goals you have laid out. Be sure to include honest assessments of where the next generation stands in terms of capabilities and infrastructure, ensuring that everything is in place to set them up for success once mom or dad retires.
As part of this plan we help you set bold goals and map the capabilities needed by function and business to realize your goals. For more personalized help or to discuss how a company-wide growth plan can alleviate some of the pain points you may be experiencing in your own family business, feel free to get in touch. We always love to hear from you.