“Hope” is not a Strategy--Communicate
It happened again, a week or so ago.
I was visiting with the eldest son of the owner of a very successful, long-standing Vancouver Island business. This son has been the general manager of this business for many years and makes all of the day to day business decisions. He has been very effective in increasing the revenue and decreasing the overheads by implementing practical systems.
Two other siblings work in the business, but not in direct management roles and do not have the capacity to do the work that the eldest son does.
Father and mother, who own all of the shares, pop in from time to time, and consider themselves “in control” of the business while continuing to receive very healthy incomes.
When asked the question “What would the situation be if Dad and Mum died today?”, he had a one word answer: “Disaster”
I would never suggest that I have any or all of the answers to this very common dilemma.
But it is most likely that Dad hasn’t taken the ﬁrst steps his succession planning process because he knows that there will be conﬂict. As he built this business from the ground up over many years, he had many conﬂicts-with staff, with suppliers, with customers and with bankers. But he knew how to handle these. He made his own decisions, right or wrong and lived with them. He could ﬁre staff, suppliers, customers and bankers.
But family is always family. And conﬂict with family members is something that most parents will avoid at all costs. But that cost can be huge in the long term, and can lead to disassociation of family members for generations.
As I work more and more with family business owners and family members in attempting to work out Succession plans, there is a common complaint, typically from the second generations, and that is a lack of clear communication on the part of the Senior generation. There tends to be series of both “signals” and “messages” but no clear communication.
When it comes to Real Estate, the three most important considerations are Location, Location, Location. With Family Businesses the three most important considerations are Communication, Communication, Communication.
Need help with your Succession Plan and Exit Strategy?