Passing on the family business: Tips for a smooth ride
Forbes recently published an article about the Ingram family, which has owned White Castle since its founding by Billy Ingram in 1921. Its future now lies in the hands of the fourth generation of leadership, Ingram’s 43-year-old great-granddaughter, Lisa Ingram.
As the family-owned restaurant chain approaches its 100th anniversary, it is facing stalled growth, leading to concern that the company may not rely on its cult following and nostalgia for continued success.
The Forbes article describes White Castle’s struggle between innovations in an effort to remain relevant and steadfast to the products and values that have led to nearly a century of success and growth. This struggle is a regular topic of discussion with family businesses as they pass between generations and, unfortunately, there is no one formula or solution to the problem.
However, there are some things that small and mid-size business owners can undertake to ease the struggle.
Never get comfortable
If your company finds success, your competition will notice. Even if the company is lodged in the narrowest of niches, never stop looking for ways to create efficiencies and better products, services or value. The world doesn’t stop moving – neither should you.
Build a solid, yet flexible foundation
In the early stages of the business lifecycle, it can be tempting to delay planning. You’re busy just trying to keep up with growth and there will be time for planning later, right? Maybe not, and you may be pushing the company down a dead-end, one-way street without knowing it. Start by seeking counsel from mentors and professionals on matters such as market trends, tax planning and corporate legal structure. If you’re able to start with a solid foundation while considering different opportunities and challenges, your company is more likely to be in a position to nimbly and affordably adapt to changing markets and exploit new opportunities. Most importantly, understand that planning and foundation building is not a destination but a never-ending journey.
Communication starts with you. Communicate with your key employees, your frontline employees and everyone in between. Share your vision, foster ownership mentality and encourage feedback. Beyond the confines of the company, if you’re a family business, communicate with family members who are likely to be involved in the business. Communication can cultivate leadership in future generations, generate new ideas, and serve to prevent entitlement mentalities. You’re not going to live forever, but if you do it right, your business may live a life that extends far beyond yours.
Values, mission and purpose are the ever-important threads running through these three initiatives. While a company must adapt to remain relevant, such adaptations are only as good as the guiding principles at their core. Without them, innovations may be empty and short-lived.