OR are they just working to please you?
When every family member is fully committed, it sends a strong message to everyone to put the interests of the family business first before their own. For founders/owners, family member commitment gives them a certain level of self-assurance that the business will be in good hands when the day the formal handover happens (an event like death or illness of the senior leader).
But how do we galvanize family member commitment? That is a tough question that continues to bother business owners especially those whose age range from 60 onwards.
Here are a couple of disturbing statements coming from the next generation family members (31- and 40-year-old) that my firm, W+B Family Business Advisory, researched and polled in 2017.
Next Generation 1
“My parents offered me future ownership even while I was in college. It felt good being an owner but years later, I realized that having zero outside work experience became more of a liability. The only consolation I got was because I never went through the difficulty of applying for a job. There was also less pressure in terms of going to work. But how I wish I had real work experience outside my comfort zone. It’s been a difficult 15 years managing the business with frequent disagreements with papa. It is a wake-up call and this made me realized that at 39, it’s time for me to make a full assessment of whether I am worthy to succeed my father. I am playing catch up by hiring professionals and doing advance courses on areas I am weak at.”
Next Generation 2
“I have the best of both worlds and couldn’t ask for a better job. Of course, friends teased me as a COO (child of owner) but at 31 years old and managing 450-plus employees, it’s not bad. I also get to enjoy the benefits of a nice salary, an SUV and unlimited travel benefits. My classmates who are employed are still languishing with low salaries. I couldn’t ask for more!”
When they were asked about the following: future growth plans, managing complexities and balancing growth, how to confront the uncertainties of sustaining the business, their reactions showed serious reservations and self-doubt. Collectively, these were generally the responses of more than 100 next generation successors surveyed:
-If they really have the skills set like their hardworking visionary parents
-Their continuing struggle in the areas of decision-making and people policies
-Their concerns related to the pressures of expanding the business
-Balancing the old and the new ways of managing the enterprise
-Issue of business longevity, co-ownership with siblings, debt issues
-Potential conflict among siblings that will predictably surface when their visionary father is no longer around
These are natural reactions that I encounter every day. Therefore, the real challenge for business owners is to confront these questions:
-How will we know if those who are actively working in the business have the passion and sincere intention to grow the business?
-How will we know if they are just after the four P’s--Pay, Position, Perks and the Potential windfall (ownership)--the parents generously and wrongly offered them when they started joining the business?
If these questions remain unanswered or if there are no singular focus in creating powerful commitment initiatives now, these will result in many sleepless nights by the business leader.
Expectedly, the road ahead will be less paved and difficult to navigate. Hence, governance should now be the way forward.