Our parents are getting ready to retire, but I sense they’re not ready to trust that we can take over. There are four of us in the next generation. We have been in the company for a while. One of us is more serious about making something of the business and one of us has mixed feelings about sticking around to see this through. Two seem like they’re coming along for the ride. I get that our parents may have concerns, but at some point we have to move forward with having the next generation take over. How do we get there?
THOUGHTS OF THE DAY: Figure out what each player wants. Set goals and document an action plan that describes what you and your parents want to accomplish with the company. Have open and frank conversations with your siblings about what each is and is not prepared to commit to. Decide if you need help negotiating details between generations.
Meet with each member of the family to find out what they want from the business.
For your parents, that will mean a payout for the business they’ll be handing over and assurance that they will actually get paid if they give up control. They also probably want assurance that the next generation is prepared to step up and manage the business properly.
You and your siblings need to think about whether or not you can each be passionate about and committed to the jobs you’re taking on within the company.
Life is too short to spend time doing a job one hates
So don’t put the obligation on anyone to stick around if they don’t want to. Keep in mind that the business probably cannot afford weak links and no-show employees, especially among the future owner team. Make it clear that anyone who stays with the company will have to learn about the business and play a meaningful role. If that is an expectation that doesn’t work for anyone, now’s the time to step away.
Set members of the next generation on a pathway to success by ensuring that working in the company is the right thing for them or helping them to move on to what may be right for them if the company is not a best fit. For those who decide to stay, make sure each has a training program and finds a mentor to guide their personal growth and development.
Accomplishing goals and checking off “done” items on an action plan can build everyone’s confidence that progress is being made. Use those two key development tools to get both generations looking forward to the future of the business.
Make sure that the goals include significant revenue and profit growth over time.
While the business has provided a living for many years for your parents, you now have four owner-families to take care of in this generation, plus paying off your parents. That’s going to require much greater profits than were realized under your parents’ management.
If you can’t figure out how to achieve the kind of growth needed to serve the needs of the incoming generation, deal with the problem now. Look at acquisitions. Build a strong sales team. Reduce the number of families depending on the business. Do everything you can now to fix the problem.
It can be challenging taking on serious conversations about the future with family members. If you’re not prepared to do it, or you’re not getting anywhere, consider bringing in outside help. Look for experts who have successfully navigated these waters with other families.