a One of the key causes of frustration in a family business I come across is where the founder won't let go.
The fact is, there will always be someone in a family business who is a better leader than other family members. In time gone by it was the eldest son who was appointed and that often turned out to be a mistake. Totally inappropriate in 2020.
Make sure you know how to identify the next gen potential leader. It's not about age, education or most outspoken.
Of all the articles I have had published over the years, one on leadership has caused the most feedback. I have been challenged on my comment that leaders are born and not made. The most fierce argument came from an army general who told me I was wrong. For many years I have worked with numerous yr 10 students, apprentices and TAFE students. My experience has convinced me that leadership is in your DNA. It can certainly be enhanced by leadership training and hard earned work experiences under a variety of situations. To me it’s like a sixth sense when I see young people working in groups and notice individual behaviours. Also, when I say a leader should command respect, I mean your ability to command respect and trust through your values, ethics, behaviour and your natural instinct to treat everyone with equality and fairness.
Over the past few years I have facilitated confidential group meetings of business owners and family next generation rising star members.
I have also chaired monthly meetings of twelve family business owners in a large regional cities. We spent one of our meetings identifying the key issues they saw as potential barriers to their ongoing success. It's interesting because all the attendees could be classified a successful.
This group treated the meeting as their version of an external advisory board. Which is highlighted as a barrier to success if you don't have an external panel of trusted advisors.
Having developed the mind map as featured above from our robust discussion, you may ask.
Is there one key barrier to Success? - No, they are all equally important.
It's a combination of issues that all need to fit together as in a Jig Saw puzzle.
In my opinion the glue that makes it all stick together is the continual conversations you need to have and knowing what the end vision looks like.
Can you draw a picture of what the company you work for looks like in 5 years time? Or describe what the vision of the business for the future?
Simple enough question? However I can guarantee in just about any workplace you will get a variety answers. In fact many will say they don't know.
I often sent out a questionnaire to attendees before they come to one of my workshops on family business or business planning and this is always question No 1. Rarely will I get common agreement on an accurate picture of where the business is aiming to be in the future. Can you answer this for the business you work in? You would not get on a bus that did not have its destination on the front. So, are you working not knowing what the end goal is?
That's why communication is so important and it starts with the leader.
Most of our workforce works in a family owned business. Therefore, most reading this will be working in a business with a turnover of less than $50 million. Can you influence the ongoing success of the family firm you own or work for? The future success of these businesses is fast becoming dependent on next generation family members and they need a strategy to improve their business acumen. MAKE SURE THE NEXT GENERATION WORK OUTSIDE THE FAMILY FIRM. There is a saying that insanity is continually doing the same thing everyday expecting a different result. If the next generation come straight into the business from school, TAFE or university, what hope do they have of learning anything different, particularly in relation to being exposed to different leaders and ideas? In corporate life they will experience the diversity of silos, politics and egos. It's valuable learning. It should be a must do for the next generation to spend time in at least two other companies. Preferably large enterprises with great commercial disciplines in place
Speaking at a Global Thought Leadership Summit in Melbourne in 2019, The Family Enterprise Ombudsman, Kate Carnell said 75% of business' that use advisory boards want assistance with their growth strategy.
She also said advisory boards are increasingly playing a key role in Australia's small business' success stories.
"While the family business owners are often flat out with the day-to-day running of the business, advisory boards are able to realise their potential by working on the business and not in it" Ms Carnell said.
"They help set a clear plan forward and help business owners focus on growth rather than getting distracted while putting out spot fires"
“Advisory boards have seen considerable growth in Australia in the past couple of years, but many family business continue to consider themselves too small or not successful enough to engage an advisory board.
“The benefits of advisory boards have been measured in other parts of the world.
“The Business Development Bank of Canada (BDC) surveyed over 4,000 businesses across the country and found sales grew by 66% on average in the first three years after setting up an advisory board.
“The BDC survey found annual sales for businesses with an advisory board were 24% higher than those without one.
“Advisory boards can also be particularly useful in succession planning, which we know is a significant issue for Australian family businesses.
“Importantly advisory boards don’t need to be a huge cost or time consuming for the business owners. You can arrange to pay a meeting attendance fee and meet every two-to-three months.”
Bill Winter is a renowned family and small business advisor and facilitator of the hard to have family succession conversations.