Meeting the Challenges of Succession in the Family Firm

Meeting the Challenges of Succession
in the Family Firm
by Thomas Davidow and Richard Narva
Succession from one generation to another does not happen by accident in a family-owned business.If you are interested in succession or the continuity of your business, you misunderstand that planning for that continuity is the critical factor.We believe the failure to adequately address the topic of succession is the primary reason that only 30% of family businesses continue into the second generation and that only 10% more continue into the third.

Succession exists as an underlying issue in all family firms, playing a tremendously important role in the life of the family, as well as the life of the business.Yet owners and operators of family enterprises rarely address succession, apparently because of its powerful psychological implications, which can sometimes be overwhelming.

Admittedly Succession Is A Complicated Topic

Thinking about and dealing with succession can be extremely demanding, both emotionally and intellectually.When you begin to examine the concept of succession, you must deal with aging,mortality, control and power, just for starters.In addition, the business issues that founders must simultaneously deal with include ownership, management, strategic planning, and   professional relationships from one generation with the next generation.These relationships include key non-family managers, clients, suppliers, lawyers, accountants and bankers. More…

Playing With Contextual Complexity: RelationalConsultation With Family Businesses (Part II)

Playing With Contextual Complexity:
Relational Consultation With
Family Businesses (Part II)

by Douglas G. Flemons, Ph.D. and Patricia M. Cole,Ph.D.
Nova Southeastern University
School

Mistaken Premise 1: Roles Exist With Individuals

Roles can be considered shorthand descriptions of interactions, for they define positions taken in complementary relationships. A child needs a parent to be a child; to be a boss one needs employees. To help in not losing such a relational understanding of clients’ roles, a consultant would do well to attend primarily to the interactions to which roles refer, to the patterns of behavior that characterize the family context, the patterns that exemplify the business context, and the patterns that emerge as a function of the family-business interface.

Such an orientation brings forth a number of interesting context-sensitive ideas to explore. In reference to the father/son relationship described above, one might ask some of the following questions:Are there aspects of the men’s familial tie that are important to preserve in their business discussions? Is the son trying too hard not to be his father’s son, thereby impelling dad to “put him in his place?” Where do they have their business meetings? Are the two of them relating at work as they did when the son was growing up? If so, is it helpful? If not, why not? Who pays for lunch? What do they call each other at work? More…