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Dialog between generations allows two points of view
Recently, the Family Business Alliance hosted a dialog between two generations: the “Now Generation” — those currently running the family business — and the “Next Generation” — those who may one day take over from them. The questions posed to the Now Generation panel were derived ahead of time from an audience comprised of 50 men and woman of the Next Generation of their family’s business.
The dialog between the generations was fascinating. There were great questions asked by the audience and many wise words imparted by the panel. Although the participants are confidential, I thought I would capture some of what was said.
First, why are family businesses so important? The statistics regarding the impact on the economy by Family Enterprise are pretty compelling. As sourced by the Family Enterprise USA, a national nonprofit geared with creating and increasing the public’s knowledge and awareness of the positive contributions made by family enterprises, there are several facts that cannot be ignored:
- Family enterprises generate 57 percent of the Gross Domestic Product and employ 63 percent of the work force in the United States
- Locally, our self-defined family businesses make up 88.8 percent of the businesses in our region, as determined by a 2001 study conducted by Grand Valley State University’s Family Owned Business Institute.
- Family businesses tend to think and act strategically over the long term, respect and value the relationship with their customers, employees and community, and spearhead philanthropic activities within their community.
- YET, two-thirds of family businesses will not survive into the second generation and only 12 percent will survive into the third generation.
Family businesses are important (dare I say crucial) to our local economy.
A dialog between generations allows both generations to see a different point of view. If an overall goal is to assure that every family business in the region has the tools it needs to manage succession successfully, then this type of dialog is crucial to the growth of our economy.
Here are a few “wise words” from the Now Generation to future generations:
Love what you do. As one panelists stated, “When it (work) stops being fun, I will leave”.
Know who you are and be a good role model. Understand and admit to your bad habits and weaknesses so your kids don’t repeat them. Don’t set unrealistic expectations.
Be true to your values. Treat your customers as you would like to be treated. As one of the panelists foresaw: “Business will change in the future, but the core values of the company will not change.”
Work hard and continually seek life balance. Have fun working, but don’t take things too seriously. “You can have it all, but you can’t do it all”.
Be an expert in your field and be open to change. Often, ways of doing or obtaining business in the future will be different than how it was done in the past. Be nimble enough to “stay with the times.”
Be transparent with your kids about money. According to one panelist, who also works with family businesses and their investments, teach fiscal responsibility early on. Keeping kids innocent about finances is not the best for their development.
Take calculated risks and do not be afraid of failure. It’s often a great way to learn. One panelist received this bit of advice early in his career: “If you never break nothing, you never do nothing.” He recommends that the senior generation allow their kids to make mistakes so they can learn from them and gain confidence in their own problem-solving skills.
Transitioning the family business takes time. Retiring is hard and often not fun. Help the retiring leaders find their next gig. One panelist found his father an international consulting position, which he loved.
Allow your kids to learn new ways to do things outside of the business. One panelist didn’t allow his kids to work for the family’s manufacturing company until they were in their early 30s. This meant the kids had to get good grades to go to the best college they could, get a job on their own, and a start a career of their own making. If they still wanted to work for the family’s company, there would have to be an opening that fit their skill set.
Communication is a two-way street. Don’t be closed-minded or stubborn when trying to communicate; try to see where the other person is coming from. Get a professional outside party to help mediate certain topics.
Wait for the right talent. Hiring the right talent is crucial for any business’s success. Family businesses are no exception. Just note: Today’s top talent wants to be a part of something positive. They also want to make a difference in the company they work for and have flexibility in their workplace in regards to schedules, attire and work habits. Family businesses are often ideal places for today’s talent to work and grow their careers.
This conversation, along with others, will be continued at our Fourth Annual Family Business Forum, “The New Millennium: Friend or Foe to Family Business.” The forum will be held at Frederik Meijer Gardens & Sculpture Park on the morning of Oct. 7. All those who work in family businesses or have family businesses as clients are invited to attend.
Keynote speaker is Richard Morris, an adjunct professor at the Lake Forest Graduate School of Management and principal of ROI Consulting, helping family owners expand and pass down their business to subsequent generations. Previously, he worked at his family's 80-year-old privately held company, Fel-Pro Inc. He has spoken at family business centers across the country, and has been quoted in The Wall Street Journal, Crain’s Chicago and Family Business Magazine.
If you are interested in attending the Family Business Forum, please RSVP to Ellie Frey at 616-331.-6827 or firstname.lastname@example.org.
Ellie Frey is the director of the Family Business Alliance (www.FBAgr.org).