If you’ve not heard the statistics, only 30% of family businesses make it from the first to the second generation, only 12% make it from the second to the third, and only 4% make it beyond generation three. So it’s no surprise that taking over a family business which has succeed for multiple generations brings with it a HUGE sense of responsibility and pressure.
First and foremost there’s the legacy of all your family members who have gone before you. From the founder who literally started with nothing and through sheer hard work and sacrifice built something to provide for his or her family, to their children who transformed the company into something bigger and every generation since who have, in their own way, increased the company’s success. It’s easy to question if you have the same entrepreneurial talent as them? Is the economy harder now than before? Is the business model still viable in today’s world?
Secondly there’s the pressure of being under the microscope. In any other job, the person who held the position before you would be off out of sight and you’d be left to fill the role however you saw fit. You’d feel confident in your qualifications and experience, you’d done enough to pass the interviews and succeed over every other candidate. But in a family business there may not have been an interview. You might have been there man and boy and organically developed into the next leader. But as long as the generation before you (and maybe even the generation before them) are still alive, there will always be a sense that someone else is watching you, judging how you do things, saying ‘I heard such and such happened’…. Most of it will just be observations and well-intentioned – after all, the business you’re now running was their life for so many years. But it still leaves you feeling like you can’t just get on and do the job.
Thirdly, business has changed. And the way things were done fifty years ago doesn’t work for today’s market. If you stand still and don’t adapt there might not even BE a business. But how can you even think about making any drastic changes to a company which has succeeded up until this point perfectly fine? 3, 4, 5, 6 generations have navigated the business through good times and bad but you know something needs to change in order to survive.
Well let’s take each of these challenges and figure out how you can actually flip them on their head and use them to your advantage.
Firstly, turn your family’s legacy into a commercial advantage. Do you know how many companies would give their right arm to have the same rich history, foundations and values as you? Yes, it can sometimes feel like the weight is resting solely on your shoulders. But what if you told your family business story to the world? There are so many examples of family firms who have successfully harnessed the marketing and PR power of their story. Create a beautiful book – a timeline of all the people, products, achievements in your proud history. Send one to every customer, give one to all your staff and share it with the wider family. If you manufacture products why not create a little archive of all the products you’ve developed over time and put them on show for everyone to see? Some families have even gone as far as creating a visitor centre with fantastic displays of old photos, products, premises, machinery – the lot! It doesn’t have to be anything big – even just a display in your reception so that everyone who comes into your business can see what an incredible legacy your family have built. Turn the ‘weight’ of legacy into something to be proud of.
Secondly – instead of feeling like your predecessors are sticking their nose in or keeping an eye on you, why not tap into their experience and wisdom? How many companies have the privilege of SO much knowledge available on tap? The older generations who have years and years of experience under their belt and the younger generation who are more tech and marketing savvy. So find a way to harness all of this great stuff – maybe it’s an A-Z company hand book. Maybe it’s a series of video interviews. Perhaps you could meet quarterly and you can bring your biggest challenges to the table – I guarantee there’s nothing they haven’t seen and overcome between them. Like the old saying goes, a problem shared is a problem halved. So instead of feeling defensive, embrace the fact that you have a treasure trove of wisdom at your fingertips.
Lastly, one of our members once said to me - ‘Sometimes it’s better to tweak than to transform.’ Yes, business certainly has changed over the years and at the moment we’re working in a very uncertain economy. But even IF your family business is a very traditional one - perhaps you’re in manufacturing, farming, or bricks and mortar retail, there’s no reason why you can’t make small adjustments throughout the business rather than drastically changing the very fabric of who you are. There’s a concept in sport called marginal gains. Could you improve things by 1% in 10 different areas? Rather than trying to change 10% of one thing? Now that you’re leading the business as the new generation, this is a great opportunity to take a look at every single part of the business and see where you can make improvements. I’ve no doubt that some of your systems and processes are still the same after 20 years when they could be far more efficient. Shake things up, look at things differently and make small improvements across the whole business.
I know it can seem daunting to take on a family business after so many generations, but take a step back and see this as an opportunity to build on some seriously great foundations.
Let’s recap on three things you can do –
ONE – turn your family’s legacy into a commercial advantage. Use your rich family story to set yourselves apart from the competition.
TWO – tap into their experience and wisdom. Instead of thinking that your older generations are poking their noses in, embrace their experience and wisdom.
THREE – sometimes it’s better to tweak than to transform. Explore small improvements across the whole business rather than trying to make big, drastic changes.
So as you go away to try some of these things, I’ll leave you with one final thought – the more successful your family business, the bigger your family’s impact.
Author: Amalia Brightley-Gillott, MD & 2nd Generation
Family Business Place