Family business as usual in unusual times

In today’s rapidly evolving world, sticking to traditional methods may no longer be the best approach. As talent, geopolitics and generational perspectives shift, it’s crucial to ask ourselves if we are ready to adapt and learn from the younger generation.

Do younger people have a vision for where the business will be in the next 50 years that older people struggle to see? Change can be uncomfortable, but it’s necessary for growth.

Generational clash

Consider this case I came across recently of a family business that has thrived for over 50 years, passed down through the generations. This year, the owner’s 25-year-old son joined the business with innovative ideas to ensure its future competitiveness. However, his father, who has successfully run the business for decades, is hesitant to embrace new technology and methods.

This generational clash is a common dilemma in family businesses. The father values his experience and the tried-and-true methods, while the son sees the potential in modernising the business. How can they find a balance and ensure the business continues to thrive?

The two generations have different views of the world which are both correct, however the father has the experience having run the business for most of his life. The technology requires money which the father regards as unnecessary and not the way things have always been done. The son feels that there is no point in the old school way of doing things. The call on what to do ultimately sits with the father.

How to manage it

If you own a family enterprise, you may be going through a similar dilemma with your children entering the business to ensure its succession. These tensions are normal especially where the business owner is the founder of the company and wants to preserve his or her legacy. The children want to keep the business going with fresh ideas and a new direction. How do you find a balance? Here are three ideas:

1.  Define a clear business strategy

Defining the business strategy can help and should be facilitated by a neutral outsider who can take the family through their business canvas unpacking all the crucial aspects from key partnerships to essential activities. Unpack the past and what the future holds – remembering that no one has a crystal ball so there might be mistakes along the way. Create a clear road map of when the parent will step down and when the child will take over.

2.  Create clear roles and responsibilities

Create a list of key performance areas and key performance indicators and allocate these between the parent and child to ensure that they do not step on each other’s toes. This will also give the business clear guardrails in terms of who is responsible for what and what they should deliver. The business will need to formalise structures and adhere to these.

3.  Focus on the business

Try to keep business and family life separate. This is easier said than done as business matters spill over to the family dinner, vacations and extended family conversations. The business is exactly that - a business, so keep the affairs of the business to within the operation of the business unless there is an emergency. Try to avoid making business matters become family matters.

4.  Have a clear handover roadmap

The child needs to know exactly when the parent will step away from the business and how the transition will take place. Mature on-going conversations need to take place often and where there is no consensus, seek out an external facilitator. Read more: Why should I not rely on my business to fund my retirement?

It is not easy to run a family business, as emotions tend to spill over into the business which can strain relations at work. If you are the founder of the business, it is important to realise that it is now time for you to bring in a new breed to take your business further.

Children of business owners need to realise that while they know a lot about the tech age, they should acknowledge, embrace and use their parent’s plethora of experience in taking the business forward.

There is no science to family business but there are ways to ensure that the legacy continues without creating family ructions.