A family business is an organization operated and controlled by the members of a family. They are companies with a soul, since the heart of the families is in them. The family business must always face, throughout its growth, different types of problems, putting these in order, the three most difficult to overcome are: succession, succession and succession.
I always clarify, in all the articles I have written, that each company is a unique and unrepeatable entity, and that it is not possible to generalize in terms of methodologies and practices to face and solve the problems that must be faced.
It is very likely that many companies are operating with practices that go against what specialists define as successful, and yet they are successful. There are so many variables that influence and come into play in business management that it is best to adapt behaviors to each particular situation.
When those of us who work advising entrepreneurs define practices or ways of acting, what we are doing is, based on experience, recommending actions that are very likely to avoid the problem or conflict, but in no way can we say that they exist methodologies that can be applied to all organizations, such as recipes, and ensure success.
That would be like saying that there are recipes that, if you follow them, ensure a life full of happiness, and we all know, or intuit, that we must make decisions as we grow and that it is about doing what we can to be happy.
The succession
It is in practice the most traumatic, for all parties, of the life stages of Family Businesses.
It is problematic for those who must leave the company in the hands of the other generation. If the event is not clear about what to do with his life after retirement, if he did not prepare the successors well, if he feels like the "father" of the company and feels that he should leave his "son", if he feels that the loss of Control is a loss of power and respect, if you are not prepared, in short, to start that stage of life, which is perceived as the last, accepting the new parameters and ways of contributing your experience to those around you.
It is problematic for those who are going to take over the management of the company. If the successors were not prepared for that, if they perceive that they are not used to making other types of decisions, if they do not understand that they are responsible for continuing and maintaining the business that supplies the whole family, if they are not capable of being respected by the employees who all their lives responded to their father, if they are not finally prepared, to begin that new stage of life, where they begin to take charge of their lives.
It is troublesome for the family. Because, normally, successor and successor, who are each facing their respective crisis, live together or meet regularly and no one enjoys when the affections suffer, and more if someone feels responsible, directly or indirectly for that suffering.
It is troublesome for employees. Because they must adapt to the new form of leadership, it is very difficult for anything to change in succession, each one has their own way of leading. Normally, the oldest employees, established some kind of sentimental link with the previous director, then they feel that they lose that relationship.
It is problematic for suppliers and customers, generally for the same reasons as employees.
Ultimately everyone, absolutely everyone, those involved in one way or another with the succession must go through a stage of crisis.
The depth and consequences of these crises will depend on the way the change is accompanied.
Normally we are reluctant to changes, especially to sudden changes, the greater the intensity of it, the more resistance we oppose. We accept evolution because they are small subtle and continuous changes and we hardly perceive them, but we are reluctant to revolutions, they scare us, and we accept them only if the situation before it is unbearable.
There are no recipes to face the succession.
But, if we understand what this process generates in each of those involved, it is likely that we can understand the reactions, our own and others, strange or unexpected that appear at this stage, and that generate fights and discussions and even, sometimes, breakdowns of irreversible relationships.
It is about knowing that we are going to go through a crisis, that each one is going to experience new ways of living and working, that each one is going to be learning and adjusting to that new situation. So if you talk, if everyone tries to understand and understand each other, you attack problems and not people, and they try to help each other.
It is almost always essential to ask for help, to have someone who acts as a mediator and can see the problems from the outside, without getting emotionally involved.
The most advisable thing, always understanding that it is not a recipe, is to face the succession in stages.
That the successors take over some sectors, according to their capacities, production, or administration, or purchases, and begin to make decisions on their own. At this stage, it is essential to create the governing body of the company, the board of directors, where strategic actions are discussed and decided, with the participation of successors. In this way, they learn about the values, the essential competencies, the strategic strengths and the way to solve problems. In these meetings, the progress of business, sales, profitability, RESULTS is also controlled.
Little by little, the event is leaving the operational positions and begins to participate only in the board meetings, as a shareholder, controlling only the results without participating in the day-to-day decisions. Thus the successors are assuming the responsibility of obtaining results from their management. Always understanding that each one is going through their own crisis.
Styles of succession
Throughout the years of collaborating with Family Businesses I have seen all kinds of crises and reactions when facing the succession. Each one is a unique case, but there are background characteristics that sometimes allow them to be typified in styles. Some of the styles that I am going to describe are already typified in some bibliography, others I add.
When I die all this will be yours.
It is the monarchical style. The only way to deliver the crown is by dying or by getting sick. He always finds excuses for not facing the succession, he handles, almost exclusively, the distribution of money and information, that gives him power.
The successors, if they are in a comfortable position, let him do it without committing himself and without participating. Those successors who want something else leave the company because they know or sense that nothing will change. These cases are the most difficult, and the company is most likely to fail when the founder dies.
I have not personally attended many of these cases, the monarch does not need help, so he never calls us.
The repentant
The happened man makes succession plans that he never implements. Sometimes he retires but returns immediately, because he does not know what to do with his life, because the successors were not prepared or because he was never convinced to leave.
A customer once told me:
.- Help them (your children) to carry this forward, I do not want to continue, I am old, I want to do something else.
After two months of work.
.- I had to go back, because even though sales improved, they still lack, there are many things that are not working well.
Despite my insistence, he continues to manage the money, he distributes benefits in his good judgment, no one receives a salary according to what he does, and handles the information and does not share it. Board meetings are not held.
The successors become frustrated, they do not know if the problem is their disability or that they are not allowed to do it, and they stop participating.
Successor:
- You said you were retiring this year.
The Happened
- I'm retiring next year
Failed succession
When there is no planning, even if the event is convinced to leave the management, what is transferred to the other generation are problems. The new directors are not trained, or do not really want to take over but the founder does not want to continue. In this case the crises are deep and everyone blames themselves for the failures.
The Embassador
The event leaves its place, in an orderly manner, and remains a visible face of the company. He is the representative before the sectoral chambers, before important clients, negotiates with suppliers. That is, the image of the company is still out.
This is a good way to mitigate the crisis, the founder continues to feel useful and the successors feel supported in the change.
The inventor
It is another variant of the previous case. The father withdraws and dedicates himself to developing new products or services, or maintenance. The consequences are the same as the previous case
The unexpected succession
I have seen more than one case of sudden death, or after a short illness, of the founder.
This type of succession is one of the most traumatic because, in addition to the pain of loss, the organization suffers even its most intimate fibers.
The leadership crisis is very deep. In a company that I had to help, we had to gradually change all the staff, since no one recognized the authority of the young successor, who was facing his own crisis.
I insist that each case is unique and each has its own characteristics.
The objective of presenting this typology is that, perhaps, each one can see himself reflected in his way of acting and understand why he feels so uncomfortable at this stage.
I always insist on this, that each one look at himself and try to understand himself, we are specialists in judging the behavior of others. There is no possible change if we do not face a profound personal change.
If we know and understand that we are going to face a stage of crisis, we prepare ourselves to understand ourselves and understand those who are, in their own way, going through their own problem.
To understand how we often see things, nothing better than an example.
“A lady who was very nervous and argued and fought with everyone, went to see a doctor and he prescribed a sedative, she had to take one a day.
After a week he returned and the doctor asked him: "How did you feel? The pills did some effect on him." To which she replied: -None !! I feel the same, it helped a lot that everyone was calmer this week. "
