What To Do When The Second Generation Takes Charge Of The Family Business
By Kyle Danner - March 21, 2019
Starting a business is one thing. Sustaining it over time, through generations is a whole different animal.
What happens when the second generation assumes the mantle and starts operating things? How does the business change? How do family dynamics change?
Taking the long view and establishing clear boundaries between family and business helps ensure a healthy and strong respect between the two. Now that daughters and sons are in charge, new challenges emerge, meaning new opportunities present themselves for brothers and sisters to build upon the work of the founding generation.
It’s no longer just mom, dad, and the kids. The kids are grown up, married and building families of their own, which means in-laws and grandkids are added into the picture. Business never stops, so it’s tempting, and easy, to turn holiday and birthday celebrations into business meetings even with the in-laws and grandchildren around.
Don’t do it.
Just talking about business isolates in-laws and other family members not active in the business. Ask in-laws and others for help in keeping those boundaries. If you can’t think of anything to talk about besides business, try playing board games. It sounds corny, but it’s an activity that focuses on family spending time together, and it’s a distraction from business stress.
Don’t talk negatively about each other in front of other family members. If your children only hear that Uncle Joe is an idiot, it’s going to be difficult to work for Uncle Joe in the future. It also interferes with developing positive relationships with their cousins who may be their business partners one day.
Plan For The Next Generation
Learn from the first succession and take steps to prepare for the next one. This includes creating formal policies, like how family members join the business. Guidelines can be as simple as requiring family members to work for five years in another company and applying for open positions like any non-family candidate.
Formal job descriptions are essential to this process, which can be a stretch for some. The entrepreneurial streak from the founding generation with its tendency towards lack of structure and planning may be ingrained in the company culture.
Are The Kids Ready For What's Next?
The second generation presents an opportunity to begin formalizing operations, and job descriptions are one way to start this process. The U.S. Small Business Administration offers tips on writing job descriptions and the U.S. Department of Labor’s Occupational Outlook Handbook is an excellent resource. Reading job postings from companies of similar size on careerbuilder.com and themuse.com makes the process easier.
With clear boundaries and a long-term view, the second generation holds the opportunity to reinforce relationships among existing and new family members as well as formalizing operations, which prepares the company for future generations.
But what should you do if you aren't sure the next generation is ready to take over?
I offer training specifically designed to help Next Gen leaders learn how to maximize their strengths and minimize performance risk. Using the StrengthscopeLeader™ assessment, I'll work with the next generations to help them determine where they excel so they can take over the business and continue to love what they do.
Click the button below to learn more.