It may be natural to talk about the family business—whether long before or during a transition—when family members gather for holidays, but is it smart? When families, family business, and the holidays converge, it’s natural and convenient to talk about business because, well, everyone is present in person. Having business-related conversations in person—especially those that relate even tangentially to a one-day transition from one generation to the next— is far more effective than video or audio calls, texts, voice messages, or emails. In-Person Interaction From life experience we know that
The role Transition Guides play in family business transitions is critical because their experience, insight, and use of a proven transition process greatly increases the odds of transition success. And, as the frequently quoted statistics indicate, success in family business transitions is not guaranteed or easy. Success in family business transitions means different things to different people, so please allow us to share our definition. For a family business transition to be successful: That’s a high bar to clear, but 100% of the owners who have completed our process (The
In our article “Creating a Business Transition in a Volatile World,” we focused on two words—volatility and plan—to try to shift a common mindset that causes owners to put off transitioning their companies to successors. Let’s dive deeper into that discussion by focusing on the consequences of a decision to delay due to a fear of volatility and a strategy that helps owners embrace—rather than fear—volatility. A Tale of Two Owners Chris and Lee are two fictional owners. Their boats are metaphors for their businesses, their passengers for their successors,
We frequently meet business owners who are hesitant to make a plan to transition their businesses to successors—often their adult children—during today’s volatile times. If volatility has put your transition on pause, we’d like to help change your mindset by focusing on just two words: volatility and plan. Volatility According to Merriam-Webster, the word volatile means: characterized by or subject to rapid or unexpected change. We see the word used a lot lately to describe the financial markets, wars in the Middle East and Ukraine, and national politics, to name
If sustainability in family business transitions means that a company passes to the next generation, and the company continues to do well, then the odds are not great. It’s an unpleasant reminder, yet the most commonly quoted business transition statics are: We believe that there are almost as many causes for this dismal record as there are families and understand that external factors come into play as well, such as new competitors, changing regulations, evolving technology, or economic downturns. Today, however, let’s focus on two internal factors that you may
The transition of family businesses from Generation 1 to Generation 2 are complex, yet complexity increases exponentially in transitions from Generation 2 to Generation 3 and beyond. In this article we look at (1) the reasons for the complexity and (2) four building blocks of sustainable family business transitions. Families: They’re Complicated! Transitions from Gen. 1 to Gen. 2 typically involve parents and children in one family unit. This family could be blended (meaning it includes children from prior marriages), and that only some children might want to participate in
Great title for an article, right? A great topic, too … if only it were possible to know if and how early preparation saved a family business. But there isn’t. There are simply too many unexpected twists and turns, route changes and reboots in every transition journey to know that early preparation is the one thing that prevented a family business transition from becoming a catastrophic failure. What we do know is that longer planning runways dramatically increase the odds of successful family business transitions because long runways give owners
“If you don’t know where you are going, you’ll end up somewhere else,” so said Yogi Berra, the man The Economist magazine named in 2005 as the “Wisest Fool of the Past 50 Years.” As far as we know, he was not talking about family business transitions, but his words certainly apply. Through long experience guiding owners, we’ve found that preparation is the best way to increase the odds of transition success. In this article, we share with you five key steps in preparing a family business for transition. Step
Navigating the complicated terrain of private and family business transitions is both an art and a science for everyone involved: owners, successors, their families, and us, as Transition Guides. On the art side of the equation are experience, intuition, careful listening, open-mindedness, humility, confidence, humor, and the attitude that others have the best of intentions. On the science side are setting and prioritizing goals, choosing a transition path, assessing family members’ preparation, willingness and ability to transition successfully, and preparing successors to lead. Today we want to introduce you to
