From Birth to Succession

 From Birth to Succession

A baby is born.From that moment on, expectations build.What kind of person will the child be?Perhaps later:Will this be the successor to the family business?Will s/he take what the owner has built to new levels?

Lee Hausner is a psychologist and recognized authority in family systems and effective-parenting techniques.She calls the children of family businesses heir apparents because their are so many ‘ifs’ involved in succession.If the heir apparent develops their self-esteem and a unique set of skills; if the family business is presented in a positive manner; and if the family dynamic encourages it’s members, then a good chance exists for a positive transition.The road to succession begins at day one and requires constant maintenance throughout an heir apparent’s life.At the core of the challenge, says Hausner, lies the realization that successors to family businesses are not born.They develop.

What Is This Family Business?

Even before a child can say the words, they may understand more about family business than adults think.Hausner has consulted with family business owners whose work is a continual source of tension and stress.Why would a child aspire to spend their time there?If the business preoccupies the parents 24 hours a day, the heir apparent might grow up thinking of the business as a rival for his or her parent’s affection.

“Children don’t understand why they are unhappy,” says Hausner.”They simply know that they are angry or frustrated.”If the family business is associated with those emotions, it becomes a less attractive option for a career. More…

Hiring Policies for Family Owned Businesses

Hiring Policies for Family Owned Businesses

The Jim Moran Institute for Global Entrepreneurship

Should hiring be strictly a business issue? There are two different approaches to this question. A family business could require family members that are interested in joining the firm to apply and compete for positions in the same manner as any other applicant. Promotions would be based on qualification not family membership. After all it is important to get the best employee for the position and to avoid any morale problems that may arise if an unqualified or underqualified family member is given a position in the company. On the other hand, in some family businesses there is a place for every member in the business that wants a position. Oftentimes in these businesses a position is created if one does not exist for an incoming family member. After all, it is a family business and it is the strength of the family ties and the commitment of family members to the business that is the greatest asset of the business.

In reality neither approach alone works best for a family business. A hiring process that incorporates the concerns of both the family and the business is the preferred approach. How would that work? Ideally thorough entry rules should be written up before members of the second generation begin to come of age to start working in the business. If these rules are clearly defined and have been articulated to all family members many misunderstandings could be avoided and lessen the possibility of offending anyone. I have found in my experience in working with family businesses that a majority of families have not established clear rules of entry for their children. Without rules, decisions about each family member have to be made on a case by case basis. The problem with this method is that it is difficult to be objective. More…