As Australia`s population ages, the management of the “baby boomer” generation becomes an issue for government and society alike. The same management considerations also exist for many family business structures with the one generation the “senior generation” looking to retirement and a new generation looking to step up to fill the void. Whilst for many businesses this transition is a simple one, for many others this transition is highly problematic with issues such as trust and experience at the forefront of the concerns from the senior generation.
Whilst many of the businesses we service who face generational transition issues come from different industries, the similarities are staggering, quite often the generation who started the business believes that the next generation do not have the skills and ability to run the business let alone grow the business to its full potential, yet the senior generation are often unwilling to give the next generation the tools to achieve a successful transition.
As part of our assistance of such businesses we instigate a generational management plan which allows the responsibilities within the business to be handed from the senior generation to the younger generation, this requires trust from all parties and an assurance that lines of responsibility will not be crossed, this is a challenge for many however it is vital if the transition is to take place. These issues can be exacerbated if there is a sudden illness or even death of a member of the senior generation within a family business structure, for many the stress of losing a family member can be bad enough let alone dealing with a handover of responsibilities within a business.
Depending upon the industry, it may take many years for the transition to be complete and the business needs to be honest about its own abilities and staff skillset. In some situations it may be best to bring in individuals from outside the family who have expertise in multiple organisations in the same industry, they bring varied ideas and often best practice experience that the business is lacking, as the family members often have only ever worked in the family business.
Another recurring theme in these businesses is technology and its use, many of these family businesses use antiquated, outdated technology that is no longer cost effective to run, yet the senior generation are still reluctant to move with the times, this is where industry expert consultants can be used for a short period to advise on the best path forward and best practice for the business.
Whilst the issues above are important generally the whole situation comes down to one word – trust, there is no doubt that the senior generation want what is best for the business and the family, years have been spent working hard to create a business of value that can be handed on from one generation to another but the senior generation have to be able to trust that the next generation have the skills and drive to see the business grow, which in most situations the younger generation does have.
The path to generational change is a long and difficult one and the challenges should never be underestimated, having a specific plan in place is vital and the instigation of the plan must be faultless in order of the business to grow and prosper into the future. Condon Associates are experts in advising family businesses in generational change, feel free to contact our office for confidential expert assistance in managing transition.