Many family business leaders eventually confront the reality that simply doing more of the same to get more and more wealth is not the best use of their efforts. When this happens, what should they do next instead? It's different for everyone, but shifting their focus to the questions relating to the proper transition of all their family wealth to the next generation is often a good way to move forward and begin to look at what's truly important to leave a lasting legacy.- Steve Legler
‘You won’t get anywhere without an education!’
It’s catchphrase countless parents have used over time and rightly so. But when it comes to your own family business, do you apply the same line of thinking? In this post, we explore some key ways family business education can enrich your working life and family.
At Insights, we know first-hand that communication is at the heart of every successful family business. Many families dread the thought of a formal meeting, but we greatly admire those families that take bold, decisive action to encourage healthy communication.
“You do not need the best possible organization while you are alive; you need the best possible organization that can survive.”
Every family business faces challenges. Some are easily resolved, but others, especially those involving several family members, can take years to make headway on.
The importance of women in family business cannot be understated. From the late ‘90s to 2015, the amount of women running family companies has quintupled.
Despite this progress, less than a quarter of the average family firm’s executive team is composed of women. While women wait for greater acceptance as equals in the business world, many are hard at work behind the scenes.
Australia’s family farm owners are five times more likely than the average person to still be working over the age of 65, and that could be a problem. Too many family farms are ignoring succession planning and appear unprepared to pass on their business to the next generation.
If you operate or work in a family business, you’re part of a very Darwinian food chain. Everyone knows the statistics: fewer than 1/3rd of family businesses make it to a second generation. Approximately 10-15% make it to a third generation. Less than one-in-twenty make it to a fourth.
Here it is!
Whether the original dream was yours or was born from inspiration generations ago, the vision is likely the same. Make it exceptional and make it last 100 years.
Women have always formed the heart and soul of the Australian family businesses and, excitingly, are assuming more leadership roles than ever. It’s great to see that kind of progress, but we also know that the greatest challenge faced by female business leaders is often balancing the roles of leader, co-worker, wife, daughter, and many more.
A Family Business Survival Kit
When all of the complications and distractions are cleared away, isn’t that what we are all actually striving for?
Whether the original dream is ours or was born from inspiration generations ago, the vision is likely the same. Make it exceptional and make it last 100 years.
Four Videos that can help family businesses
Dr Lee Hausner is an internationally recognized family business consultant and clinical psychologist. In her keynote speech at the National Family Business Australia conference in August this year, she opened by saying, “There is the business of business and the business of the family. If the business of the family is fine, the business will be fine. So we need to focus on the family.”
At Insights we are committed to producing resources that equip and inspire the families behind family owned businesses to increase their effectiveness and success.
Our latest offering is an e-book presenting family business through the eyes of the women who lead and work in them – across diverse ages, cultures, roles and ownership models.
This month we wanted to highlight some truly influential women in family businesses. From Australian start-up founders to multinational directors, their stories are both unique and inspirational.
Sue Ismiel founded waxing company, Nad’s, after experimenting with hair-removal formulas at her kitchen table in 1991. It has since expanded into a $42 million empire and she aims to list the business within two years. After recently appointing a CEO to handle the day-to-day running of the business, Sue has been freed up to concentrate on philanthropy through her foundation, Sue Ismiel & Daughters. When her three daughters inherit the company, she will be one of the first Australian female business founders to hand over the reins to a second generation of women.
Unfortunately, many families become so involved in the day-to-day running of their business that they lose sight of their long-term aspirations.
Investing the time to develop and maintain a shared vision is crucial, as it ensures there are coherent beliefs in place to unify your family and business for the long term.
“… if you want a happier company, team, unit ,organization or family, you need to capture their core identity by creating, refining and retelling your story. That act alone may increase the odds that your family will thrive for many generations to come”
“First recognize that for any group or organisation to be successful it needs to be led, managed and governed well” John A Davis,PhD Harvard Business School
Most family businesses fail because they lack the discipline, governance structure and leadership to handle all of the challenges they are going to face. They mishandle or fail to plan for succession transitions. They do not communicate effectively in both family and business. They ignore the need for innovation in a fast-moving world.
An old saying goes: “Families are equal; Businesses are equitable.” If you run a family business, however, the ideas of fair and equal may not always match up.
Effective communication in family businesses is essential. As the number of stakeholders increases, so does the complexity of the family business. A family constitution is a way of managing that complexity. Here are a few reasons you should consider developing a family constitution.
Family Businesses untapped resource
When you've spent a lifetime building a successful family business, it is natural to have concerns about its future.Planning for the future is difficult enough, but planning for the success of your family business once you hand over to the next generation presents unique challenges.It is not uncommon for the founder to wonder if the next generation will be able to handle the challenges that running a successful family business needs. Quite often that means worrying about the changes that next generation will undoubtedly implement.
Are they your connective tissue or weakest link?
It is critical that family and business values be reconciled in a family business. In “Fostering Family Value(s)”, Olof Bik and Michel Adriaansens point out that there are two sides of the values coin, regardless of where those values originate. How does one “embed and preserve the integrity of core values,” yet avoid the pitfall of a “strong culture turning into a repressive culture”?
Could you use some help?
Communication is one of the most difficult and important skills any business family has to learn. At Insights, we have a range of communication resources available for free.