The coaching helps founders, or first-generation families-in-business, build a bridge to the next generation. Founders and their family members learn to position their companies and families for ongoing success amid a fast-changing business landscape and increasing family complexity. Structure the planning of your transition to the second generation—no matter how distant or close that transition may be. Keep your family business on a path that builds upon the founder’s groundwork and grows value for another generation or more. Accelerate crucial conversations among the founder and his/her family members to resolve issues and set plans for sustaining family and business success.
Family-owned companies, on average, outperform non-family companies, and those at the founder stage are the best performing among them. There are many competitive advantages and good qualities of first-generation family companies that should be continued. At the same time, most founder-stage family companies, unfortunately, don’t succeed in the second generation. But a family can beat these odds, regenerate their success over generations, and flourish. Companies and families need to evolve to stay relevant and guard against vulnerabilities that can be crippling.
To propel a successful first-generation company into the next generation, founders and their families need to develop and successfully blend the next generation into the governance, ownership, management, wealth-building, succession planning, and other important activities of the family. They must foster talent in the management and ownership groups, build good governance of the company, owners, and family, and grow assets for future activities.
Successful founder-stage businesses are enviable powerhouses in many ways—innovation, growth, and returns on assets to name a few. Much of the company’s success—at least for a while—is due to the strengths of the founder and the organization of the company around him or her. But overreliance on the founder makes growing beyond the founder and transitioning the company to the next generation of the family very challenging.
Extending success beyond the founder stage typically requires
- Building upon the special insights and capabilities of the founder while flexing the company into new products, services, technologies and markets as required.
- Developing an organization and board that utilize strong talent, usually requiring more distributed authority.
- Bringing qualified family members of the next generation into the company or onto the board of the company, developing loyal and supportive owners, and building unity and high standards in the next generation.
- Addressing sibling relationship issues, or other family relationship challenges, that paralyze decision-making or threaten family unity.
- Fairly compensating and rewarding family and non-family contributors to business success.
- Encouraging a timely taking charge of responsibilities by the next generation and the transfer of responsibilities by the founder so the company and family maintain strong momentum.
- Partnering between generations in a mutually advantageous manner.
Added to these traditional requirements are factors that now dramatically affect the success of first-to-second generation transitions: new and often disruptive forces acting on industries and businesses; new generational attitudes about careers and lifestyles; advancements in human longevity; new sources of investment capital; and more plentiful buyers for a family’s successful business. These present both challenges and opportunities for future family and business success.
Needless to say, to beat the odds against survival and continued success requires a disciplined game plan.
Much needs to eventually change in generational transitions: the leadership team in the company and how decisions are made, the governance system, eventually the ownership group of the business, even family relationships tend to change some as the next generation assumes responsibilities and authority. Understandably, with roles and relationships shifting, these first-to-second generation transitions are often complicated and emotionally sensitive experiences.
Critical aspects to be covered
- Deciding the mission and values of the family’s activities that the family wants to perpetuate
- Planning for the growth, evolution, and diversification of the business and the family’s other assets
- Building management talent and management and governance systems to professionalize (increase the capabilities, methods and standards of) the business and family office
- Choosing the right ownership model and building a united and capable ownership group
- Developing a reinvestment and dividend approach that meets company and owner goals
- Developing a united next generation team
- Preparing the next generation to capably assume key roles in and out of the business
- Preparing for an effective generational transition—no matter how distant that transition may be—respecting the interests of both generations and the family company.
Provides daily expert coaching in private family discussions that culminate in an action plan for a family’s important next steps.
- Focus on the big objectives facing the family and family business and work for collective interests
- Address natural family tensions, such as competition and different interests, to build a strong family and second-generation team that works well together
- Structure and manage important family conversations that address important topics in a respectful and sympathetic manner.
Your family will have conversations you need to have and will leave the program feeling closer and more aligned about your future as a result.