Business Leader Post, October 18, 2013
Thomas D. Davidow, Ed.D.
Educating the next generation on how to run the family business is analogous to teaching your 16 year old how to drive your brand new car. The level of emotion inherent in the activity creates anxiety and tension which makes communication difficult. Sometimes it can be overwhelming. Most people tend to ignore/avoid the activity of training and instead hope and pray that it will all work out or that somehow the next generation will learn through osmosis.
This "hope that it all works out" method reduces the chance of success to less than 10%. Training the next generation is the key to the successful transition of ownership and management. Training is also essential to reducing the tension between the two generations and in the family as a whole. It is extremely unwise to ignore the need for training. At the risk of sounding melodramatic, it puts the business and the family at risk.
The first step is for the senior generation to think about how to accomplish the task of preparing the next generation. (This first step could be the biggest challenge for some.) Break down the skill sets that you know are important to run the business and create a list. These skill sets can include: how to manage/evaluate/ get the best out of your employees; read a profit and loss statement; marketing; sales; banking relationships; how to pick good advisors, etc. The list will be long but not necessarily endless.
The next generation needs to create their own list of skills that they think are necessary to be fully prepared to run the business.
Both generations should evaluate independently where the next generations' strengths and weaknesses are regarding each skill set.
One you have completed your assessment, the two generations need to compare notes. I guarantee that you will have an interesting conversation. If the conversation breaks down quickly, there are other issues that need to be addressed. You may need a consultant to help you. I am sure you can fine one in your area. Good luck!