Hi everyone!
I found a
short + interesting article, which is about succession planning in small-medium
sized family businesses:
http://www.forbes.com/sites/russalanprince/2015/01/21/most-middle-market-family-businesses-need-a-succession-plan/
I support the author’s opinion that communication problems about
succession planning are often caused by doubts. I personally could imagine that
communication about this topic often even exists, but it is not open and honest
enough, for example because the family owner (who are often strong and
dominant characters) unconsciously
pressures his/her children to "want" to enter the company.
But I think the
topic discussed in the penultimate paragraph is even more interesting. Do you
also think that for a successful continuation of a family business, it is necessary that the successors have worked in other companies before - instead of
entering the family business straight after their studies?
I think
that in many family businesses, the owner is already older than 55/60 when
his/her children finish studying, which means that he/she cannot stay in the
company for another 15 years, just to wait for his children for a few years a) till they have made their career in another business, till they finally
enter the fam.bus., and b) another 10 years or so till the owner has taught
them how the company works in order to make him/her a good manager of the fam.bus.
– which cannot be neglected if the fam.bus. is expected to be continued successfully. So there are for sure many owners who tell their children "Please come and help me immediately after graduating, I feel that I'm getting older and less powerful, and can't work for another 15 years".
I cannot imagine that it's necessarily difficult for fam.bus. successors to gain credibility
and trust from the employees if they had never worked in other companies before.
Of course, most employees might have prejudices and might doubt whether the
owner’s child is competent enough, as he/she got that good position just because he/she is the owner's child. But on the other hand, I could imagine that
a fam.bus. successor could also have a good chance to gain the employees' credibility and trust if he/she shows to be seriously engaged and hard-working,
and by having a sophisticated business education/ studies, which enables them to prove to be competent enough while working for the fam.bus.
What do you think??
Sarah
Hello,
ReplyDeleteFrom my perspective succession is probably the most important topic concerned for a family business. However, I think succession planning is such a gamble and no matter how much one prepares there will be no correct way to actually be secure in regards to the matter. I think you’re right in regards to the matter that by the time children graduate from university the first generation owners are in their late 50’s to 60’s and are in a rush to show their children (the eldest son in most instances) the ways of the business. I also feel that in a family business employees who are not family members will always feel some sort of animosity towards the child regardless of how hard working they are if they are automatically handed over a high position before showing their worth. However, from what we’ve learned in regards to the Ilapak case what’s the harm in temporary employing a trustworthy and experienced nonfamily member whilst the future successor is gaining their own experience? I think in regards to succession owners of a family business have a deep sense of emotional attachment to their business which eventually leads to the downfall of that business, especially in regards to the aspect of succession. The owner feels that only a family member should be handed over the baton even if their children are unqualified. I feel children should receive their own experience regardless of their parent’s age and can simultaneously receive mentoring from their parents at home. I think the beauty of a family business is that you can receive advice from your family 24/7, therefore, if a child were to go their own way for 10-15 years they could always update their family with their individual work issues and their parents can always discuss how they overcame similar issues with their business. This not only would allow a child to receive their own experience but they can be eased into understanding the business they will inherit in the future and gain free mentoring from their families and would probably be quite qualified when they feel they are ready to take over the business.