COACH'S CORNER
By Barry Knepper
As Seen In Queensborough - The Magazine of the Queens Chamber of Commerce

Family Business Succession

Families in the process of transferring their business to the next generation have a number of complex challenges to overcome. Maintaining the viability of the business enterprise is foremost. The bottom line is to generate revenue streams to sustain the family now and in the future. Equally difficult is maintaining healthy relationships among family members directly and indirectly involved in the business. The actual hand-off between the generations can be seriously undermined by disruptive family issues such as a history of parent-child conflict or sibling rivalry, marital discord and alcohol or drug addiction. Underlying these issues is a basic lack of trust among those involved, often requiring professional assistance to sort through and resolve underlying problems.

There are also more typical challenges that need to be worked through in successfully handing off to the next generation. These include:

1. Letting go. The first generation leader, often a strong, hands- on entrepreneur, is required to make the gradual, difficult shift to a more mentoring, advisory role. After years at the center of the storm, so to speak, letting go is more complex than it seems. It's an emotional, life changing process which requires developing a different, less central role in the company, and the development of new endeavors and roles in business, the community and the family.
2. Stepping up. The second generation leader(s), often self assured and confident, can struggle to "gradually" assume responsibility for the family enterprise. In their frustration to move up and out from under their parent/leader they can develop a defensive arrogance, cutting them off from the deeper learning needed for success over the long haul. Maintaining a balance between their wish to move forward and their need to remain respectful and open to mentoring can be difficult.
3. Going slow to go fast. Successful family business succession takes time. It requires good business and succession planning and lots of room for hands-on-practice and on the job training. Above all, it requires regular and effective communication among the principles, family members and key employees. It's at least a three-year process.

Family business succession is a journey with long-term financial and relationship ramifications. Investing your time and resources in this significant venture will set the stage for good stewardship of the family business for generations to come.