Statistics tell us 7 out of 10 family businesses will not successfully transition to the next generation. The question is, what can you and your family do to make sure you beat the odds?
Here are a few tangible steps you can do to take over a family business, which are based on my 20 years of working with family businesses all over the world.
Build Leadership and Communication Skills
Let’s face it, at the end of the day great teams and great companies need great leaders. Even if your family has a successful track record, it will not succeed in the future unless there is a competent leader or group of leaders at the helm.
Leadership and communication skills are tangible, measurable and can be learned and developed. Pick a couple of leadership books and begin to put together a plan to build your leadership skills. Attend a Leadership Workshop or hire a Leadership Coach to help you measure and improve the leadership skills within your family.
I encourage families to build a broad base of leadership skills within the entire family. In the past it was common to have one charismatic or powerful leader. In today’s world it’s really important to have a team of competent leaders. These leaders will help your organization navigate the myriad of demands that are put on a business and family.
Develop and Rely on Business Professionals Outside the Family
Having been around many successful and unsuccessful family businesses, I’ve noticed that the successful family businesses are not afraid to develop and grow talent from outside the family.
Our family business had 300 employees and we had a large group of professional managers. It’s important for family members to not only learn how to interact with outside professional managers, but to learn how to leverage their strengths to improve the business and the family’s chances of success.
Many successful, multi-generational families actually transition from owner-operator to owner-investor. What that means is the family owns the company and they actually rely heavily on professional managers to lead the company.
Don’t be afraid to find, develop and grow professional managers. You can even develop incentive and ownership programs that give them some of the benefits or feeling of being in the family without giving away the store.
Develop a Fresh and Engaging Vision for the Future
One of the most common problems is that a family business is still trying to operate under an antiquated vision from the founder.
If you want to take over the family business, you need to develop a new, fresh and relevant vision that will resonate with the younger generation in the family and the younger generation of workers.
A family business is like an organism, it needs to continue to grow and evolve to meet the demands of an ever-changing world. Successful, next-generation family business leaders develop new innovative strategies. These strategies will help a reputable business gain momentum and growth in an ever-changing world.
Put these three strategies in place and you will be well on your way to taking over the family business. I believe the coaching approach to leadership is the most effective leadership strategy for today’s workforce. I hope you’ll check out my Family Business Playbook which will teach you how to become a coaching leader and create a high-performing and engaged team.
Pete Walsh is a demanding, courageous and playful Master Coach in Phoenix, Arizona. He is the founder of Peak Workout Business Coaching and the Family Business Performance Center. He can be reached at firstname.lastname@example.org.