We all know the story of the surgeon reporting the operation went well; the only problem—the patient died.
Some thirty years ago family businesses became a subject of investigations, and advisors rushed to help them. Their initial thinking: because it is inherent in the nature of family-owned enterprises that leadership is by family members, the businesses lacked the necessary acumen and skills to be successful. Consequently, they focused on establishing procedures, protocols and practices that helped the businesses prosper. The only problem—the family died.
Since then emphasis on helping family businesses has shifted focus—and importantly so—onto family needs and goals, with expertise coming from a wide range of areas including psychology, family counseling, family systems, estate planning, mediation, conflict management, career development, substance abuse, wealth management and leadership development.
My own experience though, in providing life support for early-generation family businesses and their families, has revealed that many need to learn the importance of professionalizing the business and understand how to implement professionalization if they want to be successful across generations.
Professionalization is the process of moving a business from an owner-centric to a management-centric entity—one in which the business operates from established processes rather than requiring its leadership to provide daily supervision. Achieving this goal allows leadership to focus on the necessary entrepreneurial roles of business development, client cultivation and long-term planning for both the family and the business.