Successful Successors think ‘Informed’ Opportunity
29th September 2020
A successor was talking about his evolving career plans with the family matriarch; all seemed well as such conversations with grandparents often do. Out of the blue, as if prompted, she espoused the following: 'I don't care what you do or where you go, but into that business you must go.' 'That' business was the family business. Until that point, only mentioned in passing and certainly never as an opportunity nor as obligation. The comment appeared to insinuate both. At the same time.
What is an effective way to introduce you as successor to your possible involvement? The challenge is to balance suitability and fit with the requirements of the family company. Prompts from an 'emotional' angle can influence you to make decisions on the family business prematurely and with sparse information
What is a helpful learning, testing and decision process to allow you to work through a sequence of stages to arrive at an ‘informed’ decision as regards your possible involvement to your family company?
How might we provide a 'compass' to you as you commence and work through the decisions that come with the opportunity of ownership?
First, consider how the ‘opportunity’ of ownership may work against you.
An opportunity is a time or a set of circumstances which make it possible to do something. As a successor there are usually a number of positive 'circumstances' which individually and collectively present as ‘opportunity’: wealth, family capital, access to networks, education, a stable home environment, a family business, the families’ reputation. It is a long list.
Below are four examples of how this 'opportunity' message may be presented or amplified for you as a successor. Consistent one from quite a young age, the message will tend to re-enforce as you age. It never goes away or dissipates. All the signals allude to ‘opportunity’ in circumstance.
The interest and suggestion of an individual – usually a family member – whom you admire and respect. The proverbial 'hand on the shoulder' as a prompt to consideration of a course of action or key decision. To a young 'successor' such attention and involvement towards a certain action is a hard one to ignore. The ‘opportunity’ as presented both steers and amplifies. In my case a situation such as this prompted an ill-advised move to an overseas role. In hindsight the move for me was premature, poorly thought through and ill-supported. While presenting as an 'opportunity' by the family, my lack of preparation and information on the role was not in fact an opportunity at that time.
A sense of duty is strong and debilitating; legacy is a very powerful thing. Informal and unprompted suggestion that the family business is ‘for you’ presumes action out of commitment, duty in lieu of suitability and availability in lieu of aptitude. Duty can 'crowd out' an otherwise natural inclination to discovery, self-awareness and readiness.
Opportunities available through the family business are signaled in a number of ways. Formally, through policies, voiced expectations and inclusive language in family documents such as charters or constitutions. Signaling will also occur in a more 'private' or less formal setting. Comments, questions, assumptions, statements by other family members, peers, teachers and co-workers can all combine and amplify. Together these present the family business as preferable, unique and available directly in front of you; yours for the taking.
Finally, the 'opportunity' in family business ownership is never as powerful as when it is the subject of parallel or sequential consideration by a sibling. A subconscious impulse to ‘make your turn or take your turn' is a strong and natural one. Almost an entitlement. To force a decision or take one in quick response to the possible involvement or unplanned departure of a sibling is unwise. A reaction to ‘get inside’ and address suitability and consequences later usually ends badly. So does rejection. Assumption that your turn is next, without diligence as to the ask or patience as to suitability, is a stark example of the triumph of opportunity over possibility.
Thus, as a successor, the way for you to turn ownership from opportunity to possibility is to be informed and aware.
A 'possibility' is a thing that may be done or chosen out of several viable alternatives.
An opportunity becomes a possibility only if and when you as successor are as fully informed on circumstances, have sufficient variation of input to the decision in front of you and have considered the potential impact on you.
The question for you as a successor of a family-in-business is: what should I inform myself on and how should I do it?
To inform yourself on your family it is helpful to think in terms of past, present and future.
First, if you have moved beyond the second generation, how did your family manage this succession in the past? Family folklore will be replete with stories about prior leaders. For information, those who are currently filling their shoes is a good place to start. Talk to them. While seeking to understand how things worked (and why), keep an ear out for reference to past conflict. If current family members are on speaking terms, that is usually a good sign.
Second, to the present. Does the family have agreed policies as to family involvement? If so, what are they? These usually take the form of stipulations on prior experience, necessary qualifications and details on the selection process. Some families do not permit family managers at all. Others apply quotas to the number who may be employed in any generation from each branch of the family. Finally, some families insist on entry to a certain part of the business they own such as companies on the periphery or 'non-core'. A bit of digging should uncover if your family has prepared itself for the interest and involvement of successor generations of the family, i.e. you.
Finally, a look to the future. What is the families' source of value to the family business? How will that value be directed and permitted in the future? Aside from the money invested (the capital) what value do the family bring as a collective and as individuals? To evaluate this, think on the role types that may be occupied by family members. As managers, Board members, business founders, wealth managers and/or as owners with their own ‘professional’ and private networks.
The way to inform yourself of these opportunities is through a blend of 'public' and 'private' routes. Available policies, documents or family protocols can be the 'public' route. However, it is unwise to rely on these alone. One must go to the 'private' well, initially through observation and conversation. Be alert to those 'presenting to you' from within the family on employment and career matters – such conversations usually include an agenda and a long memory. Listen to the water; take time to set up informal but important conversations with family working in the company, those in leadership positions (such as family council members) or those family members governing the family business. As you do this, with luck you will encounter a relation who is willing to share their experience, will be honest in the challenges faced as a family manager but will temper this with a clear and evident enthusiasm for commitment to a career in your family business. If a relation will not do this, go outside to other families-in-business. Many are willing to share. If you are lucky enough to find this individual, you are on your way.
Prior to joining the family business almost thirty years ago, I had no prior introduction to the family company. I did not appreciate the scope, scale and nature of the company I was joining. In hindsight, this was a mistake. To address this, the first question for one to address is the most obvious; what does the family company do? If you were to 'roll-up' your sleeves for a day (or longer) in the company, what would you be doing? Ways to this are well known and well-trodden; summer jobs, work experience or 'digging-out' when resources are thin and work needs to be done. Within the bounds of the requirements of health and safety, those of professional expertise or other practical considerations, aim to work as near the coalface of your business as you can. If you retail, stack shelves; if you manufacture, move and load stock; if you make food products, assemble ingredients; if you wholesale groceries, work in your customers' stores; if you provide legal services, work in a court room. You get the idea. There is no more sure-fire way to inform yourself on the 'opportunity' to you of contributing to the family business than 'hands-on' experience. This is your foundation to turn 'opportunity' into possibility.
Second, what is the size of the company and the extent of its operations? Some of this you can uncover with your laptop. A simple – but effective – indication is the number of sites owned and/or the number of people employed by your company. Reference to other companies in the business you are in will quickly indicate where your company is on the size pecking order. If you are still unsure, just ask.
The final question I would encourage is perhaps more difficult to address. To fully appreciate the 'opportunity' open to you, you need to do some work on the competition. In short, who will your co-workers and co-managers be? Where do non-family management in your family company come from (home grown, hired in) and what are their qualifications? In a smaller family company this may be relatively straight-forward. Indeed, you may already know the key managers and they you. A good start. When the company grows, there will be more non-family managers each with his or her unique experience and skills. As best you can, find out where and how they achieved their expertise. Is this what you need? Take the time to uncover their attitudes and aspirations for themselves and the company. Talk to them; listen to their stories.
Experience, employer origins, qualifications and outlook of such managers will be a very good compass as to what is required to succeed in your family business both now and in the future.
Your 'opportunity' is in the place where family and business come together. The career field or 'profession' of family business, your families' business.
Your next task is to understand the essence of your family’s relationship to the business it owns.
All families are attempting to 'solve' three issues: the purpose of their family business, how their family will work together and the relationship between the family and the business. These are the holy grail.
To commence, aim to understand and appreciate three areas which taken together underpin family-business. Think of this as family business 101. First, what is the relationship of your family to the company it owns? Is it ad-hoc, vested in a single individual or is there a family group appointed to oversee it? Second, how does the family manage or govern this relationship? Is there a clear agreement among the family group that does this? Finally, what is your family company for? Is it to grow, support the family or is there a stated greater purpose for which the company stands for?
Again, ways to do this are both public and private. Take time to investigate and learn from those other families-in-business who come together to share experiences and ideas. These are the ones who will share. Simultaneously, investigate your own business. As you do this, attempt to compare and contrast that which you 'see' in your families' case and the examples and ideas from the other families-in-business known to you. This task never ends. Your 'private' quest may take longer. How does your family address (if it does) the three issues above? If there is a written document or agreement start there. Your best bet at this stage is to identify a family member who can explain the lay of the land in simple terms.
This is a supple skill. Give it time to develop. Your task at the outset is to understand the possibilities open to you now or in the near future.
"We can analyse the past but we have to design the future". W.B. Yeats, poet.
The way to effectively design your future with the family business is to inform yourself of the opportunity that comes with ownership. Your family, the business and the combination of the two will repay careful study. Successful successors know that possibility follows from an awareness and understanding of the specific circumstances of ownership in which they find themselves.
My next article will present ways to help you understand what determines your 'value' to your family company and what you are measured against. I will cover ways for you to plan when and how might be a good time to become involved if that is your aim.
The following are a number of references which develop the themes discussed here.
Peter Drucker (1999) 'Managing Oneself' Harvard Business Review, Nov-Dec.
Next Generation Engagement in UK Family Business, IFB research Foundation.
McKinsey. Generation Z and its Implication for Companies (www.mckinsey.com).
Philip Mackeown is a leadership coach and mentor for family business successors. He previously held positions as manager, Head of the Family Council and Family Director within his family business, over a 25-year period. He founded and ran FBN Ireland (www.fbnireland.ie), a network to support families-in-business. He is currently writing a book on successor talent development within business owning families. He writes and publishes a fortnightly blog for successors to families-in-business. See http://www.philipmackeown.ie/latest-news/