05/4/16

Fifth Generation and Almost Out

Family enterprises that have continued into their 5th generation often have processes in place that helped them overcome the challenges they encountered through the years. They have a vision for the future. They have a declaration of shared values. They have governance structures, such as a family council, an external advisory board. They have a forum for family members to discuss the family in the context of the business. They have gained foresight and have learned how to address situations where family members undergo a loss of capacity. They have a funded growth plan. They have an established mindset that accepts the need to turn leadership responsibilities over to the rising generation; and the incumbent leadership has their retirement plans in place.

Often–but not always.

Here’s the story of Yuengling Brewery, an “almost casualty” rescued by a fifth-generation prodigal son.

http://www.inc.com/dick-yuengling/how-a-father-son-rift-almost-destroyed-yuengling-brewery.html

04/29/16

Reality Is Bigger

Last week I attended the annual conference of Attorneys for Family Held Enterprises (AFHE). While there, I had the opportunity to hear speakers from a range of professional disciplines: family business advisors, financial planners, psychologists and attorneys.

I was particularly impressed by the clarity of the presentation entitled Engaged Ownership. More Effective Governance for Multi-Generational Family Businesses’ given by Amelia Renkert-Thomas, former CEO of Ironrock Inc., her family’s 5th generation manufacturing business and founding partner of Renkert Thomas Consulting LLC.

In her presentation Ms. Renkert outlines commonly held assumptions about family business and counters them with realities. Here are selected bullet points taken from her slides:

Assumptions

  • Making money is the primary objective
  • Succession is about who will run the company
  • Shareholders are primarily interested in dividends
  • Continuity is the preferred outcome

Reality

  • There is more at stake than money
  • Succession is about preparing for multiple roles
  • Shareholders are primarily interested in shared purpose and vision
  • Continuity of core capital, not necessarily the business

All of these points are ‘tip-of-the-iceberg’ statements, the results of study, thought and experience. They invite investigation, discussion and action. What are your thoughts?

12/13/15

The Last-Minute Succession

In his recent blog, entitled “the last minute,” Seth Godin writes “I’m not good at the last minute. It’s really fraught with risk and extra expense. I’m much better doing things the first minute instead.” http://sethgodin.typepad.com/seths_blog/2015/12/the-last-minute.html

For a family business, ‘last-minute succession planning’ is similarly afflicted and is, sadly, too often what takes place. Successful succession involves much more than the final transaction that formally transfers ownership. ‘First-minute’ succession planning is a process of ongoing conversations among family members regarding the values and vision the business will carry into the future. These talks function to define the business’ culture, create governing policies, teach wealth management skills, identify and develop next-generation talent and leadership.

To see my video blog on this topic, CLICK HERE.