You’ve decided that you are on the path to being a Family Enterprise. You are not at the point to need to liquidate assets and now you are faced with one of the most difficult questions – “do you have family members willing and able to take the baton?”
We strongly advise you, not to believe you have the complete answer to this question on your own. This is when the door opens to having conversations and communicating with your family. For many this is a daunting thought. It’s easy being the decision maker and strategizing with employees. It’s a whole other ball game involving the family and dealing with emotions and family dynamics.
The only way to know if you have family members willing and able to take the baton of the family business or family finances is to ask and discuss it with them.
This is also a moment we would ask you to look deep into your way of viewing things. Are you looking to have your next gen be just like you? And if they don’t have your qualities are you labeling them unfit to take over? Often we hire people who are like us. If we don’t aim for people better than us we do not improve the leadership of our enterprise. Is it not worth looking at the differences and noting how they can be an advantage and add to the leadership of your enterprise? Food for thought.
When dealing with family dynamics we often much prefer not to go down that path at all and choose not to open the door to these difficult conversations filled with emotions. More commonly seen than opening the door to face the elephant in the room is a term we call Triangulation. Triangulation happens when one or both of the people involved in a conflict try to pull a third person into the dynamic, often with the goal of deflecting the tension. In the end, reaching no means of resolution and sometimes even make the conflict worst.
If you are ready to continue down the path of being a family enterprise and you have set ground rules to continue your continuity planning you may want to put some of the following topics on your list of conversations to have. If you agree to be agreeable, compassionate, open minded and take the spot of listening when its not your turn to speak, then you may be ready to check off each of these “elephants” occupying empty space in the room.
Such topics are:
- Are outsiders accepted or not?
- The feeling of being criticized as the next generation and thinking we are better then the past generation
- Labeling family members as: the golden child, the black sheep, the rescuer, the trouble maker, the pleaser, the hero, the ATM, and ingraining a pattern of interaction that becomes hard to change
- Does gender matter?
- How age difference between siblings plays a role
- Birth order, what role has that played
- The need for unique identity
- Communication: what are we allowed to talk about?
- Feelings: how do we deal with emotions?
- Authority: who has what power in the family?
- Conflict: how do we manage conflict and disagreements?
- Money: what is our relationship with money?
- Values: how are we expected to behave?
These conversations are not easy by any means. I encourage you to tap into your courage and keep moving forward one conversation at a time. If the topic feels too loaded this is a great time to bring in a skilled facilitator.
A very helpful tool used in the FEA practice is a genogram that is a resource for understanding family structure and relationships, and their impact on the individual. It maps out changes across the generations. It also brings to the surface repetitive patterns and the effects of birth order and gender roles. The tool can also go as deep as showing how families manage emotions and solve problems. It can also note how trauma and crisis has been managed, and what health issues and addictions may show up in the family.
The benefits of developing a personal family genogram are:
- Bring family experience to consciousness
- Recognize family and personal strengths and vulnerabilities
- Better understand your own triggers and reactions
- Understand how family experience can impact business relationships
Another tool to help face the elephant in the room is conducting a family SWOT analysis. What are the family’s Strengths and Weaknesses, what Opportunities are there and what are the Threats facing the family. With this analysis you can then see gaps, and add to your continuity planning the skills needed to fill these gaps.
Family enterprises succeed past the generations when a strong continuity plan is put into place. While succession is a series of events that happen within the next 5 years, continuity is the whole time horizon – the 60 year or 100 year plan. Continuity focuses on working together and not on how to divide things up. Continuity is moving forward with intentionality with regular and continuous communication.
Continuity encompasses the following:
- a dynamic process with multi-generational lens
- continuous change and growth
- incorporates all aspects of family enterprise system
- led by a family for a family
- multi-stage and reflective
- value creation
- encompasses a variety of elements
Families often don’t engage in such a process if not in a crisis. They don’t do anything because they don’t know such a process exists. Also there is often no urgency in beginning a continuity process and the need is not in your face so it is put aside. In many cases it is left for years until it is too late. Do you want to put your seatbelt on after the accident?
Building a business is easy in comparison to strengthening your Family Enterprise. Do take the time to face each of these elephants and you will be rewarded with a legacy that will last for generations.
Decision Tree Question: Do you have family members willing and able to take the ‘baton’?