Challenges To Creating Change Initiatives In Family Businesses—Two Kinds Of Practice

Recently I’ve been writing about the challenges of creating change initiatives in a family business where the older generation is in charge. One of Seth Godin’s recent blogs, Two Kinds of Practice, http://sethgodin.typepad.com/seths_blog/2017/11/two-kinds-of-practice.html touched on what I see as a critical aspect of this inter-generational dynamic.

According to Godin, in the first kind of practice, we learn to play the notes as written, coming as close to a specified standard of perfection as we can. Applying this to family business, we learn to conduct business as the generation in charge does it. Practicing this way, Godin adds, we can become very proficient.

Learning to play the notes as written is sound advice. It respects the past while helping to develop an understanding of the family’s values and why we do business the way we do. The business environment though, is in constant flux—today more so than ever. The successful business will keep an eye on the future and have a mindset that embraces innovation.

The second kind of practice Godin describes as being “more valuable but far more rare.” This he says is the practice of failure. “Of trying on one point of view after another until you find one that works. Of creating original work that doesn’t succeed until it does.”

Founders of family businesses sometimes forget that their know-how was gained from their own painstaking efforts that resulted in errors early in their careers; or perhaps are reluctant to return to those times of uncertainty and anguished miss steps. But when founders seek to maintain their own comfort by denying this process of learning by trial and error to members of the next generation, their actions may lead to a painful decline of both the younger generation family members and the business; a decline fed by an inability to adapt.

Some families build their businesses on the practice of failure as a value. For them innovation is seen as a key to growth. But they are rare. In the majority of business families, the natural conservatism of the generation in charge is at odds with the natural forward-thinking innovative attitude of youth.

These two sides for different reasons are often blind to each other. And being blind, a clear vision for the future of the business is compromised. At this point it becomes wise to seek the help of an impartial outside observer. An expert family-business consultant can help take the blinders off, reawaken the incumbent generations’ memories of struggle and failure, remind them about how they succeeded, and set the new generation free to do the same.


Dreaming, Intention and Process

If your dream is to see your children carry on the family business, you must both look at every day with that intention, and enjoy it as a process. And, as Seth Godin writes in a recent blog: “…the end result is always at the end of an arc, always the result of many steps, of earning trust, of building a connection.” http://sethgodin.typepad.com/seths_blog/2016/10/now-is-never.html


Decisions—Instruments of Movement

When struggling with a theme for this blog, I often seek inspiration from Seth Godin, well-known author, entrepreneur and marketer. In a recent blog entitled The ripples, Godin opens with: “Every decision we make changes things.” http://sethgodin.typepad.com/seths_blog/2016/09/the-ripples.html

It follows therefore that every business decision we make changes the business. It can be large–move the business from Brooklyn to Florida–or it can be small–meet a casual contact for coffee at Starbucks. The apparent size of the decision does not foretell the size of the consequences.

Some decisions are made for the short-term, some for the long-term. But decisions are instruments of movement… and what is seen initially as a short-term decision can start a series of dynamic changes that continue far into the future.

At the end of the same article, Godin asks: “How did you get to where you are? Who is going to go even further because of you?”

It may be useful in the conduct of our day to day business to keep this in mind. What decision that you made today, however small and ordinary, may bring your business and your family further than you can imagine? For generations.


Working With Siblings

In a recent blog entry, Seth Godin wrote about options for finding, leading and motivating employees in a small business (he used the term “tiny business”). He characterizes three different management styles, what types of employees work best in each, how they work together, how they relate to being led: “a team of equals, “fellow travelers,” industrialized employees.” He sets forth both advantages and pitfalls inherent in each option.


These same types–equals, fellow travelers, employees–will exist in family businesses staffed by siblings and/or cousins whether in leadership or subordinate roles. Understanding the distinctions, their pros and cons will go a long way in strengthening family relationships and the business itself.

Are siblings in your business equals, fellow travelers or employees?


But What Will I Tell My Grandchildren?

Seth Godin recently wrote a post with a seven-word title: “But what will I tell the others?” He calls these out as: “Seven urgent words that are rarely uttered.” “The profound question…”

These are, he says: “The words we imagine we’ll tell the boss, the neighbors, our spouse after we make a change or take an action… this drives the choices that constitute our culture, it’s the secret thread that runs through just about everything we do.”

Upon reading this post, I saw its significance to members of family businesses. From their point of view the question that immediately came to mind was: What will we tell our grandchildren about decisions we make regarding our family business? What will we say to them about decisions that will drive the family culture of future generations?

You may see your role in your family business as existing only for the duration of your leadership. Alternatively, you may see your role as growing the wealth of both the business and the family, and passing them on.

You may work to make your business successful for today. Or you may take up the challenge of ensuring a strong foundation that will support the business for leaders of future generations.

You may envision yourself creating a culture and a legacy; inspiring future generations to reflect back with pride on your leadership and your words.


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.


The Not-Ideal Path

Seth Godin recently wrote a blog post titled Natural Light. http://sethgodin.typepad.com/seths_blog/2015/11/natural-light.html.

In it he describes two ways of making things. One way is to tightly control conditions. To ensure consistently of outcome, pre-process the inputs so that all raw materials are precisely the same every time.

The other way Godin calls “the path of natural light.” Take what you get. “Embrace the idea that the conditions will never be ideal, which of course makes them always ideal because the thing about natural light is that whatever it is, is.”

My experience is that raising children and integrating them into your family business is more often successful when the path taken is the way of natural light. The differences that exist between and among you, your children and other family members are part of what makes a family business succeed.

To achieve this outcome requires participation in creating a vision for the future of the family and the business under the leadership of the next generation—and willingly relinquishing control of the results.