Throughout the month, Coach Pete seeks out strong players in the family business world in order to bring you real stories of real family business professionals to inspire, drive and lead you forward. From the stories of legacy builders to examples of outstanding succession planning, the star players Coach Pete comes across are navigating the game with confidence and wisdom. Check out a few of the Coach’s Best Plays in this month’s roundup:
Why Fights Erupt in a Family Business
In this article Prof. Soriana states, “Fights in family businesses break out because they can. In non-family businesses, there are barriers to keep things from escalating.” He suggests the following steps to manage the inevitable disagreements.
- Draw clear management lines
- Establish clear methods of communication
- Disagree with respect
Family business members should remember to separate family from business. Decisions in the business should be made with the best interest of the business. This may not necessarily be best for every member of the family. Communicating these decisions with respect is key.
Families Find the Principles That Keep the Business Going
Eleven families featured in a new book, “Family Spirit: Stories and Insights From Leading Family-Owned Enterprises” (Chronicle Books, 2015) recently came together and provided insight into multi-generational family business.
Commonality was found in three characteristics of family business: long term thinking, internal quality control and financial prudence. Although the families varied on percentage of members working in the business, the focus was consistently growth, talent and family unity. Notable to Family Business Performance Center members: ALL the businesses had policies requiring next gens to work outside the family business for at least five years.
Minding the Family Store for the Next Generation
This article explores how the Hirshleifer family overcame an unplanned succession. The father, and founder of the business, never shared any management details or decisions with his three daughters. When they took over the business, they made some important changes including:
- Family members working in a role suited to their talents
- Delegating decision making
They are now planning for succession when their children take over the reins.
The bottom line: Only 30 percent of family businesses survive into the second generation. Just 12 percent are viable into the third and 3 percent beyond that, according to the Family Business Institute.