There are some common generational problems associated with many family companies. In this article I identify some of them and how to effectively cope with them.

– A Business Owner Who Won’t Delegate:  A very common problem in family enterprises is the owner or CEO who can’t let go.  Many owners have a strong personal connection to the business which prevents them from allowing next generations to assume more responsibility in the business and become more involved in the company’s  Strategic Plan.

• The second generations are “entrepreneur successors” in training and the business owner patriarch or matriarch should be very careful not to dull that passion and drive.
• An inherent attitude that an owner’s or founder’s shoes cannot be filled is common in a family business; therefore, it is vitally important to the future continuation of the business for a clear path toward ascendancy for the next generation be established through training, mentoring and delegation of responsibility.
• Consider hiring experienced Turnaround Consultant to help you work through these issues in order to develop a clear ascendancy plan that is fair, yet, challenging.  Establish clear goals and expectations so next generation family members can strive to attain goals and career growth, without crushing their passions and drive.  The Business Consultant can impart valuable experience and objectivity to this often controversial issue.

– Helping the Next Generation Gain Acceptance, Respect and Credibility:  If a family member has worked from the bottom up during their formative years, gone off to college to earn their business related degree(s) and gained valuable expertise and experience working for an outside firm, give him or her the respect they deserve.

• Next generation members will work hard in the business if they are praised, encouraged and accepted as equals.
• Be careful not to set expectations too high, they should be in line with the family member’s training, education, personality, skills and experience.
• A next generation member should express strong interest in the family business so the family knows of his or her passion, drive and interest level.
• The next generation member should know what their capabilities are and communicate that clearly to the family owner(s). For example, if the family member has an interest in Marketing, then be sure to involve him or her in the company’s  Business Plan Process.
• A next generation family member should conduct a self-analysis of goals and skills:
  • What are my strengths and weaknesses?
  • What areas do I need to work on or need help on?
  • What other parts of the business do I need to learn about?
  • What are my leadership qualities?  Are they sufficient?
  • What training, mentoring and continuing education do I need to carry out a leadership role in the family business?
  • Am I happy working in the family business?
• Three Stage Training Program for Family members joining the business:

  • Stage 1:  Initial learning stage to fully understand all the aspects and divisions of the Company:  Cross-Training.
  • Stage 2:  Specialization in a particular skill.
  • Stage 3:  Become a generalist, learn to manage, motivate and lead.  Need to have strong strategic Management Skills.
• Mentoring relationships between the family member and the business owner and others in family based businesses, can be very healthy and really solidify the long term development necessary to the next generation’s growth.
• As previously discussed, a next generation family member should work outside the family business as this will increase his or her knowledge, experience, confidence, and most importantly, enhance credibility with family and non-family employees alike.

About Frank Goley – The Article Author

Frank Goley has a diverse and rich experience base as a business consultant, business turnaround consultant, business plan expert, business plan writer, business coach, small business consultant, business planner, marketing consultant, online marketing consultant, seo consultant, and business plan consultant for ABC Business Consulting. Frank is considered an expert in writing, developing and implementing business plans, business turnaround plans, funding business plans, marketing plans, strategic plans and web marketing plans. Frank offers comprehensive business consulting, business coaching, business turnaround consulting, along with web seo, web development and web marketing consulting, to small and medium size companies. Frank is the author of a business plan book, The Comprehensive Business Plan Workbook – A Step by Step Guide to Effective Business Planning, and he has over 140 published articles and e-books on business success strategies. He also writes the Business Success Strategies Blog.