Family Business: What Got You Here, Won’t Get You There
Updated: a day ago
“Each system is perfectly designed to give you exactly what you are getting today.”
- W. Edwards Deming
"Organizations are perfectly designed for the results they achieve.
Want new results? Get a new design.”
- Paul Gustavson, a Silicon Valley venture capitalist.
If you are reading this, you most likely work in a successful, small to mid-size family business. Perhaps you didn’t define it as a family business until the next generation came along.
Until the next generation of family members started working in the business, everything worked the way it was supposed to work for the way it was organized.
I’ve worked with many family businesses over my 30 years of consulting, and I can tell you that what got you here, won’t get you there. Meaning, the entrepreneurial thinking of the founder or current generation of family leaders is going to need to change to make it to the next generation and beyond.
You and your business must grow, or it will die. Lou Holtz, the famous college football coach, said, “In this world, you’re either growing or you’re dying so get in motion and grow.”
The facts support this thinking: Did you know that only about 40% of businesses pass to the 2nd generation and that falls to 7-12% which make it to the 3rd generation? The truth is family businesses are at risk of failure during transitions. Statistics from the Family Business Institute suggest the current owner’s death precipitates 47.7% of failures and the founder’s death sparks 29.8%.
To survive and thrive in today’s business, you need a new roadmap, a fresh vision, new leadership, some new business tools including new technologies, and, of course, you’ll need to communicate and create your plans to appeal to a larger group of talented employees, managers, and leaders. After all, the business must become larger now because it has another family member or two or three to support, which means you’ll probably need to be earning more money to pay for them.
Many of the tools and systems that helped your father (or mother or parents) build the business must be updated. You’ll need new tools to hire, attract and manage people. You’ll need better tools to manage your growing finances, customer transactions and business expenses. You’ll need new software to stay competitive in our era of digitalization and disruption. And, you’ll need some modern day thinking to understand what’s working, what’s not and what to do about it.
As a coach outside the structure of my family-owned clients, it’s much easier for me to see what’s missing and what needs to be created or to see what’s required to transition to the next generation.
So, if you believe or are demanding it be better, and, if you don’t know where to start or how to get started; or if you know something is missing, or a lot is missing, and you are unsure about what it is, perhaps it’s time to find out how other companies are doing things. I bet you feel alone sometimes in solving these problems or even seeing the big picture. Maybe you feel out of control.
Ask yourself. What’s missing? Check the list below:
Confidence in your financial statements?
Marketing Plan to bring in new business?
Effective communication and a rhythm of meetings?
Meetings for the family and owners separate from the leadership team?
With 30 years of experience consulting to companies under 500 employees, I can help you identify what’s missing and what you need to do to take your family or entrepreneurial business to the next level so that it defies the high mortality rate.