When the next generation begins to take on an active role in the family business it can create conflict between owners and operators, not to mention parents and their children and other relatives. If you are worried about generational differences hurting your business, here are some things to consider, and a way you can use those differences for good, rather than harm.
The Next Generation Brings Innovation and Change to Business
As a first-generation business owner moving toward retirement, you may be concerned that the next generations will do things differently and hurt your company’s bottom line. It is true that each generation of business owners, executives, and managers will have their own opinions about the way to get work done. Your children may be trying to put their own mark on the company by implementing strategies they have learned in their own professional development, or through executive coaching. As the founder of your business, letting go of control and giving the next generation space for innovation can be challenging. But generational differences in training, life experience, and vision can be a benefit, rather than hurting your business.
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Generational Differences Between Owners and Operators
When older business owners begin transitioning into retirement, you will need to distinguish between the roles of owner and operator. In the first years of your business, you likely did everything – from making strategic business decisions to taking out the trash. As your business grew, you likely needed to develop leadership skills like delegation and management, bringing on more team members with different expertise. Doing so required being willing to take your hands off the wheel and give other employees – relatives or otherwise – more control over what happens in the company’s day-to-day operations.
Passing your business on to the next generation takes this delegation to the next level. Shifting gears from operator to owner means taking a further step back. However, many former owner-operators find this difficult. When CEOs and other operators make questionable strategic decisions or the bottom line suffers from the transition, you will undoubtedly be tempted to step back in. But giving in to that temptation can create conflict in your family business by showing the next generation you don’t trust them to address the obstacles the company will undoubtedly face even after you have fully retired. It could even push them to leave the family business entirely. Instead, you need to embrace your new role as owner, and offer advice, rather than trying to steer the ship yourself.
Solo Owner vs Siblings’ Team Approach to Running the Family Business
Another generational difference that is common in family businesses is that when the sibling generation takes over from a founder or solo business owner, choices historically made by one person can become group decisions. It is very common – and sometimes intentionally designed – for siblings to divide up the job of running the family business. Different relatives may take on the responsibilities of marketing, human resources, research and development, sales, and other aspects of the business based on their own strengths and interests.
But this generational difference does have a drawback: the need for consensus necessarily slows down the speed of doing business. It may take time for joint owners and operators to agree on changes that need to be made. As a former solo owner, it may seem to you that these decisions take too long, but you need to be patient. Pushing your children into hasty decisions can build resentment among family members, especially if you put your weight behind someone your family sees as a “favored child” or accidentally play into other unhealthy family dynamics.
How to Avoid Generational Differences Hurting Your Family Business
Generational differences can make transitions in business challenging, but that doesn’t mean they have to hurt your family business. By reframing the way you think about your children’s perspectives, you can gain the benefit of a breadth of experience, as well as your own depth of knowledge. But doing so requires you to step away from your role as owner-operator, or even as a parent, and encourage your children to act independently in deciding the future for your jointly owned business.
Often, the best thing you can do is provide a knowledgeable business coach who can help your family coworkers identify their operational strengths, relational patterns, and conflict management techniques. Working with an operational consultant, you can clearly define your role and the roles of your relatives, children, and other team members, and adopt new techniques that will make working with family easier, and more productive.
David Stanislaw is an organizational development specialist with over 30 years’ experience helping employees navigate the professional and personal challenges of working in a family business. Through one-on-one executive coaching, strategy sessions, and facilitated mediation, David helps family members manage generational differences and develop new coworking strategies. Contact us to meet with David and decide your future today.
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