WHO IS GOING TO BE THE BOSS?
JoAnn R. Forrester aka the Empressofbiz
For the last two columns we have been discussing
the issues involved in passing the business on to the next generation. If you have more than one heir, how do you do
it so the company and the family prospers? How do you do it so it is collaboration? A
combined team effort? Not an intense internal rivalry.
Let’s take a
look at one example. One business, ABC Hauling and Transportation Inc., has
four potential “presidents”, three males and a female. The parents started the business 35 years ago. The business has grown to a multi- million dollar
plus business with 65 rigs on the road with a large parts department which
serves smaller trucking outfits
The parents
early on decided to train all the children in the business. From office to sales, to garage to parts, to dispatch to driving, they were
trained. They all went to college,
prepared for business and were required to spend time working elsewhere.
Now
it is decision time. Do they make
decision by the traditional methods, oldest male gets the job? Or do they
you consider all the members? Of course, today all the members include
daughters. One of the most recent trends
is the amount of daughters who are taking over their family business. Now according to the SBA women account for
12% of all family firm leader and increase of 40% since 1996.
At this critical juncture, outside guidance
was sought. An overview of the business
was conducted, the financial strength, the market, assessment of its personnel,
the market, and skills needed to guide the business through the change and
beyond. What soon became apparent was
that three of the adult children wanted to be part of the daily business and
one did not. Of the remaining three,
each one had talents, skills and interests that were different yet combined
made a great team. So who was going to
be the “boss”?
After much internal
debate, the sister, Janet, was picked to be president. Why? Because she was the one who was able to
bring everyone together and get decisions made without major conflict. She also had a strong set of skills in
financial management and at this time in the economy the family felt that was
essential. And in family of dog lovers...had the smartest dog!
They also decided to limit the term of president of the
company to five years. This allows them to change leadership if needed to meet
changing market conditions. The company
is now is in its third year of transition and is stable and prosperous.
What has made this second generation transition
successful? Early planning and
preparation were the foundation for a succession transition. They concentrated on teamwork, training,
business education and outside experience.
They were also willing to look beyond the traditional answers to solve
their problems. Early preparation, education, outside experience, teamwork and
non-traditional thinking are the keys to making the second generation leap a
success.
