Predictable Futures Inc

If your business is going to be labeled as family owned, the products or services offered are associated with your family.  What kind of reputation do you desire?  What legacy do you want to leave for your children if they are assuming the business?

Quality involves the product or service itself as well as the delivery and details.  Even if you can’t make changes to an actual product offering, review your customer experience from start to finish searching for ways of improving your overall business quality.

Marketing your business as “family owned” has many advantages.  Survey after survey reveals that people trust family businesses.  Most people respond positively when they find out a company is family owned.  If it has been around for several generations, it speaks volumes about the trust customers must have for the business.

Use this in your marketing strategy, but be cautious of two potential challenges.  As David Bork points out in “The Little Red Book of Family Business,” be prepared for the expectations a “family owned” label creates.  It is very important that all family members and even employees abide by the values that your family and business claim to have.  Secondly, watch the boundaries.  Don’t confuse family affairs with business affairs—in this case, family ownership is being used simply as a marketing strategy.

Do you see the ridiculousness of this picture?  Hopefully the last couple of posts have you eager and ready to make some changes.  So now what?

Start by talking to your family.  Let them know that you want to start planning for succession.  Familiarize yourself with the process.  Seek counsel from your Board of Directors and a succession planning advisor.

If you are among the founders who would love the imaginary mind-reading technology of Thursday’s blog, you need a reality check.

Putting off succession planning is demoralizing to your employees and management, detrimental to your family, and destructive to your business.  Without a clear, agreed upon, and communicated succession plan, your management team and employees are left questioning their future employment and may start looking elsewhere for work.  Children interested in the business are confused about their role and frustrated about the uncertainty of their future.  Children not interested in the business are unclear about their inheritance and nervous about your expectations of their involvement in the family firm.  Your spouse is stuck in the midst of the founder-child tensions.  As a result of the difficulties among employees and family, your business stagnates since no one involved is confident in their roles and decision making authority.

Do not delay.  Do not assume anything.  Start your succession planning and implementation.  Get a coach who understands the process.

Don’t worry about it.  Everything will come together in the end.  Only a few more years and mind-reading technology will be a free app for your iPad.  Your family doesn’t need to talk about succession planning after all.  Mind-Reading technology will give your children and spouse the ability to access your thoughts about the future of your business, and I also heard this technology may even work post-mortem.

No more awkward conversations about your death.  You don’t have to listen to the bickering between family members about who wants to do what any longer!  Just shut the conversations down, let them read your mind, and move on.

No longer does the founder need to be involved in planning and training the successor.  With mind-reading technology, they can learn all they need to know without you training them.  It doesn’t matter that their personality is different from yours—they really should just learn to copy everything you do exactly.  You can keep on working until the day you die and once your child has read your mind, they will continue doing it exactly as you did.

If founders want to give their children extra money, don’t call it salary or a bonus.  Use David Bork’s suggestion and call it the “family factor” or more accurately, the “Lucky Sperm and Egg Fund.”  Calling it a salary only inflates their ego and confidence. 

In addition, the founder must not try to control his/her children by their purse strings.  If you want to see a family conflict escalate faster than Pinocchio’s nose grows when he lies, have a founder attempt to control his child’s finances.   Money should never be used to manipulate.

As a summary of the past several weeks of blogs, here are the top ten things you should do before hiring your child:

#10. Encourage Education

#9.  Ensure there is a meaningful job available

#8.  Ensure the job suits your child’s skills and interests

#7.  Recognize that employment in or ownership of the family business is NOT a birthright

#6.  Pay your children a fair market salary

#5.  Recognize your child’s hard work, just like you would any other employee

#4.  Make an employment policy for your family

#3.  Encourage a wide variety of life experiences before working for your company

#2.  Remember that some children will never be ready for responsibility in the business

#1.  Never forget your critical role as a parent

There are hundreds, if not thousands of individuals capable of running your company as well as if not better than you.  But there is NO one else who can be your child’s parent, and there is no one who will shape your child as much as you will.  Do not underestimate the importance of your parenting role. 

Disappointing, but true. 

Every human being is created with unique skills, attributes, giftings, preferences, and personalities.  If your children are not equipped to run a business, don’t force it.  Learn what they ARE good at, learn to accept it, and encourage them in that direction.  It may mean you’ll need to consider other succession options such as selling or merging or hiring professional management, but it is better than subjecting your wealth to incompetent hands.  See the 12 Questions every family business should ask to explore alternate options.

What kind of experiences shape and mold individuals into productive, well-rounded individuals.  Travelling?  Varied employment?  Encourage your children to have a wide variety of life experiences before working for your company to give them time to mature and find their identity. 

Many successful family businesses require that family members work three to four years for another business prior to working for the family firm.  Family members gain a sense of independence and self-confidence as they work for unbiased employees as well as learn skills that they can later apply to the family business.