That Pesky Generation Gap

Creating a dialogue between owners and heirs

By Timothy G. Habbershon

Sabine C. Veit, who brought her family's breadmaking business, Bäckerhause Veit, to Toronto, has what many business owners long for: grown children with a passion for the business. Sabine's son, Tobias, had enjoyed working with his grandfather at the original Bäckerhause Veit stores in Germany and had long said he wanted to join the business. In college, he took every class with the bread industry in mind.

Sabine loved the thought of one day working side by side with him.

Last year, as a college senior, Tobias entered his plans for Bäckerhause Veit in Babson College's business planning competition. Tobias wanted to expand the company beyond bread manufacturing into branded products and retailing. He won the contest and asked Sabine to support his plans. But Sabine was more cautious. She enjoyed running Bäckerhause Veit because it let her indulge her passion for breads while leaving room for other interests. The tension between Tobias' ambition and Sabine's prudence soon made it hard for them to discuss their options constructively.

The challenge for multigenerational family teams is to establish a dialogue about growth and change without allowing the discussion to turn into a rancorous debate. A dialogue -- literally, "talking through" an issue -- requires that everyone keep an open mind and test different options. A true dialogue doesn't accept hierarchical roles such as parent-child, boss-employee, or the one who owns the business vs. the one who does not. Instead, it unearths solutions that are not limited by anyone's original position.

To help Tobias and Sabine get started, I suggested they ask themselves five questions that could help any family-owned business launch its own dialogue:

-- Do we have the necessary communication skills? Many families assume they are able to carry on a dialogue simply because they are family. But such close ties can make it very difficult to have an open discussion.

-- Do we have the same vision for the future? Families often have a vague vision of "working together" and leave the details for later. That's a recipe for discontent and conflict. Once Sabine and Tobias acknowledged their different goals, they had a starting point for discussion.

-- Do we have the same risk profile? As Tobias and Sabine came to understand each other's hopes, it became clear they also had different fears. The successor generation is often willing to take more risk than the parents. Locking into either perspective undermines what should be a strength of multigenerational teams: a balance between risk-taking and strategic planning. The key is to find a business model that accommodates both points of view.

-- Is the timing right? Usually successors think the right time is now, and the senior generation thinks it's someday. Tobias and Sabine realized that they needed to determine how best to proceed, rather than if or when.

-- How creative can we get? The results likely won't look the way either generation envisioned. I advise family members to remember their algebra: Just because a equals b doesn't mean that it might not also equal c, d, or even e, f, and g. Once you start a dialogue, you may find you have more options than you realized.

Tobias is working in sales at Bäckerhause Veit while he and Sabine discuss their options. As long as their dialogue continues, they're on the path to growth and change.

Timothy G. Habbershon is the director of the Institute for Family Enterprising at the Arthur M. Blank Center for Entrepreneurship, Babson College

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