Organize for leadership change
Transitions in leadership tend to be more successful when these steps are implemented by the current President.
· Create a Family Council to facilitate communication and dialog about the business and to resolve personal problems before they become an issue. This group should develop and refine a mission statement and a family business charter that defines the relationship that is to exist between the family and the business.
· Inform your managers & employees that “This company will continue forever”
· Continuously educate yourself, your managers, and your family.
· Make a highly visible organization structure.
· Form a “Board of Directors” consisting of competent outsiders and submit yourself to their review. It should be part of their job to insure that the goals spelled out in the Mission Statement & Charter are implemented impartially using good business principles
· Institute an orthodox accounting system and make it available to all your managers, advisors and family.
· Choose your successor – The selection process should start early.
· Accept the responsibility to train your successor
· Settle your Estate Plans, NOW!!!
· Retire and install your successor with your powers within your lifetime.
· Apportion your time to accomplish these goals.
· PLAN...PLAN...& PLAN some more!!
The life of a family business
The average life span of a successful family held business is 50 to 60 years.
Some of the factors that cause them to disappear are:
- Inherited wealth destroys entrepreneurial drive
- Success destroys courage to change.
- Successful entrepreneur becomes too exhausted to help next generation talk through and solve problems
- Business financial growth can’t keep up with the expanding family
- Because ownership is inherited, succeeding generations loose respect for education, professionalism and effective management
- The business becomes an arena to act out family conflicts.
Families who succeed in passing this barrier tend to:
- Meet regularly, and communicate often
- Gain perspective about the business ups & downs from history
- Celebrate milestones even in periods of adversity
- Support and appreciate family members who have accepted leadership