When a member of the rising generation in a family business proposes changing some aspects of how the business is run, members of the incumbent generation may, incorrectly or not, perceive their initiative as telling them that they, personally, are outdated. That they are no longer needed and should surrender their leadership role. The incumbents’ reactions to this perceived threat can have a caustic effect on the business with reverberations felt by all stakeholders.
This situation is particularly challenging if the family has not developed a culture of conversation about the interface of the family and the business, whether about introducing innovation and change initiatives, or about the transition of leadership between generations. Conversations like these may be difficult, but if avoided the outcomes born of silence can be even more challenging.
If you and your family have established protocols for conducting conversations like these, you have taken an important step towards ensuring your long-term success.
Lacking an established protocol for conversation, a perceived threat can be diffused if a proposal for change is offered with care and tact, in a way that—by reflecting human nature—facilitates the incumbent leadership receiving it openly. Key elements of this strategy are:
- Showing respect for the past while presenting a vision for the future.
- Recognizing and acknowledging the vision, labor and accomplishments of the incumbent generation and those that came before them.
- Declaring an understanding of the importance of the family legacy and the desire to carry that forward.
Since this tactic supports and validates the efforts of the incumbent generation, it may circumvent the perception of the proposed change being seen as a threat.
However, that the incumbent generation will eventually be supplanted by the rising generation is not a threat, but a fact. So for them a different strategy may be appropriate. It may be valuable for them to recognize that transitioning out of the leadership role does not signify a departure from the business or the family. They may assume new and equally important roles; as spokesperson, senior advisor, nurturing next-generation leaders, and passing on the family values and history.
Change, for better or worse, is of course inevitable. For the family that is prepared to embrace it, new adventures beckon for both the generation that transitions out of their leadership roles and for the new generations that succeed them.