I love looking at the history of family businesses and the great stories of their founding entrepreneurs seeking opportunity. Think of the Italian immigrant baker whose cakes became a Philadelphia tradition known as Termini Bros. Bakery, the husband and wife who grew the Hair Cuttery into the largest private chain of hair salons in the U.S., and the nine-seat root beer stand that evolved into Marriott International.
But these aren't just great stories of entrepreneurship. They are also great succession stories, and we often overlook that reality.
The sad truth is that when we think about family businesses and succession, words like conflict, feud, nepotism, and failure come to mind, rather than opportunity, vision, growth, and wealth creation. It shouldn't be hard to have positive entrepreneurial thoughts about succession. Succession is a great time to think about "the new," not just the old and the past. Senior generation leaders should encourage the next generation to think about new businesses, new products, new markets, or new opportunities that might allow them to re-entrepreneur the business.
Let me suggest a few changes in the succession mindset and strategies to help you move toward "the new":
First, succession discussions should focus on the business and the family as a platform and pool of resources for new opportunities. This is about much more than handing a particular business from one generation to the next. You need to talk about succession as a strategy for creating new streams of wealth. As part of its succession process, the Biagioni family, which runs The Candy Store, a seasonal business in York Beach, Me., now has one son adding in-house production capabilities while another opens his own store in another city. The company is also partnering with a small chain to gain year-round business. This family is helping the business grow, not fighting over it.
Second, think about succession as a change process for the whole organization—in deciding which roles people will play, building new teams, planning for the future, and professionalizing structures and processes. Don't focus on choosing a single person as the successor. When the emphasis is on a single successor, you can count on conflict with the other contenders. It also makes the organization egocentric and internally focused when the emphasis should be on new opportunities.
Third, succession should be a family conversation, not a senior generation decision. Succession is a business issue, not a retirement or death issue, and it should be approached as such. The family should have regular family meetings at which the future health of the business is openly discussed. Secrecy, silence, and self-absorption need to be banned from the succession process. After all, why should family attorneys and accountants have more say in succession planning than the family members that it will affect the most? There is more creativity, less dysfunction, and a more successful outcome when senior leaders involve the whole family early and often in the succession conversation. This is the "voice, not vote" philosophy. Participants understand they may not have a vote, but they will have a voice in decisions that affect their lives.
Fourth, realize that tension and conflict surrounding succession are normal and healthy, not an indication that things are going to blow up. Succession is a very complex, emotional, and scary process. Acknowledge that, and manage the process by addressing these issues openly, not by creating a conspiracy of silence. A facilitator may be able to help ensure that the bold, opportunistic spirit that started your business remains part of its future.
Timothy G. Habbershon is the director of the Institute for Family Enterprising at the Arthur M. Blank Center for Entrepreneurship, Babson College.