How to sustain a family business over multiple generations

Preparing The next generation for leadership One of the hardest parts of running a family business. Whether a company has been run for several generations or just one so far, knowing when to hand the reins to the next leader is a challenge. Identifying the right person for the job, and empowering them to do it, is something that many family business owners face throughout their careers.

Of course, not every family-owned business has a successor to take on the leadership responsibilities of the organization. Some company founders may not have children or other relatives they can rely on to run the business, and in other cases, relatives No interest in taking over the helm of the company. Senior leaders benefit from having their leadership transition mapped out, but they often worry about their relative’s ability to handle the upcoming challenges they know will arise.

That said, it is important to prepare the next generation for what is to come.

Related: If you don’t plan for a leadership transition, your family business won’t survive

People learn from experience, not from lectures

Think back to when you were a young adult, navigating the world outside your parents’ proverbial framework. You may have encountered many unexpected scenarios which may have left an impression on you till date.

Maybe you bought your first car without any help and wound up with expensive monthly payments at high interest rates because you didn’t understand the importance of building up your credit. Maybe you’ve messed up in an early relationship or moved abroad for the first time. Typically, this experiences We create memories that stay with us for decades, and they can all serve as learning experiences that we look back on when faced with circumstances that require us to act.

You may remember countless things your parents gave you, though they may not have been in the pursuit of true experience. They certainly outlined the possible consequences of our actions, but unless you actively went against the advice, you likely never experienced the consequences.

As such, it can be tempting to prevent your child from making decisions that you know will adversely affect them, but allowing them to experience the consequences will make them better future decision makers, which will be positive for the family business.

Related: 400-year-old family business remains ‘gold standard’ in its category – its first female leaders reveal secret

Give the next generation room to grow

Lecturing the next generation on what it takes to run a business will not provide the results you are looking for. Instead, up-and-coming leaders need to have their own experiences away from the company (and their parents’ eyes) to fully understand their capabilities.

If “saving the day” is an important issue for you, maybe it’s time for you to let go Children experience life Out of your constant observation. If they’re planning for college, for example, promote out-of-state or overseas universities.

It is important to allow the next generation to identify possible solutions to problems and try them out. Even if you know the solution won’t work, they’ll enjoy the excitement of bringing a new idea to the table and implementing it. They will have room to grow within themselves and will be better prepared to face adversity as a result.

Let your successors develop their own identity

A child or relative who grows up in the shadow of family business It takes time to build their identity. A family name may be very familiar in their local community. People probably associate them with their parents’ name and company, and sometimes, being the child of a family business owner makes it easier to get accepted into prep schools and colleges.

It is important to push them to create their own identity by working towards a degree of their choice and joining clubs or activities that interest them. Do not force yourself agenda; Allow them to develop their own identity.

Additionally, instead of hiring your relative fresh out of college at the family business, require them to work at another organization for a few years. The experience away from the family business will open their eyes to new ways of handling work-related issues that can benefit the family company in the future.

Related: How to successfully prepare your family business for the next generation

Carry out character development activities

People who always have someone to “bail them out” are never given the opportunity to learn their abilities. Whether you are the founder of your family business or a second generation leader, you have failed in some of your endeavors and you probably remember your failures and what you did to overcome them.

Facing and overcoming complex challenges is part of developing a solid sense of character. Instead of giving up on them and letting someone else do the work, future leaders should work through their difficulties.

Give your future leaders a chance to fail. As harsh as it may seem, they will learn that hard work and thoughtfulness are critical to overcoming obstacles and gaining the confidence they need to face them. Future shocks.

Don’t hand everything over on a silver platter

You’ve probably worked very hard to get to where you are today, and you’ve probably seen significant successes, losses, and everything in between. You want to make sure your future leaders understand what you’ve been through, even if they didn’t witness it in the early days of your company.

Instead of directly handing over the keys to your business to your child, let them do the work for them. If you are nearing retirement age and they are not ready to run the business, find another family member or a trusted outside consultant to handle it for a while. They can guide the next generation and move on the path of succession according to the right timeline.

It can be tempting to assume that the next generation is ready to take over your company and allow you to enjoy your twilight years, but you must ensure that they have time to develop skills and understand their identity. The best things in life come from hard work and determination, so give your company’s future generation of leaders room to build their character before handing the business over to them.