Posts Tagged ‘succession planning’

Top 5 traits family business should want for the next generation

passingkeyResilience and self-reliance

Life brings many challenges.  One of the greatest assets a person can have is the ability to handle adversity.  At the beginning of most family business stories is a story of overcoming adversity.  Too often the other end of the family business story is young people being handed too much too easily.  In the end this can be a great disservice to the next generation.

I know that as a parent we are anxious when we push our kids out into the world to find their way, but at the same time it is one of the most important gifts we can give them.  I am encouraging every family to have an employment policy that requires the next generation to go out and on their own for two years before joining the family business.

Healthy individual identity

Young people need to find out who they are outside the context of the family business.  I grew up in a family business that had great name recognition in our town and it was a good feeling.  But it was an even better feeling when I created my own accomplishments and began to know who I was outside of the family business circle.

When I got asked to lead at my Rotary Club, industry association, and Little League, I began to know my inherent strengths and leadership ability outside of business.  It was a great feeling.

I see a stark difference in the confidence and abilities of next gen’s who apply themselves and create success in areas outside of the family business.

When a healthy individual identity is created outside of the family business that person becomes 10 times more valuable inside the family business!

A fulfilling career

So many of us want to see the family business continue but I would rather see my children in careers that are personally rewarding.  We should encourage our children to explore and understand their strengths and find careers that play to these strengths. I see many 45 and 50-year-olds that find themselves 20 years into the family business career and are left unfulfilled, wondering if they should have pursued their passion.

Make sure, encourage, and demand that the next generation explores their strengths and passions fully before dedicating themselves to a career in the family business.

Emotional and financial security

Many family businesses give next gen’s a great leg up on the financial security piece but I find many times the emotional security and well-being is not great.

Family leaders should help next gen’s find out who they are, find rewarding and meaningful work, create a strong individual identity and then they will have the greatest combination of all: great emotional and financial security.


Isn’t that what it should all be about?  I’m not trying to say life should be easy or simple but at the end of the day the greatest gift in life is to find happiness in all of our day-to-day trials and tribulations.

I see many people who sort of fall into the family business and then at some point look up and realize that they are not happy for a variety of reasons.  Life is short and we should help the youngsters learn how to be thoughtful and courageous about taking responsibility and setting their own course for happiness in their life.

Parents: Don’t let style differences implode your succession


In case you haven’t noticed, we are all wired with different behavioral styles!  Look around and you’ll see it: fast and decisive, slow and methodical, spontaneous (and lacking accountability), and consistent and conservative.  See behavioral styles (and my acting ability) at work in a funny four minute video click here to watch the video.

The bottom line is people are wired a certain way and the sooner you accept that and work with it in a positive way, the better off you’re going to be.  I can’t tell you how many times I come across fathers and sons, or mothers and daughters who are pulling their hair out in frustration due to a reaction to the other person’s style.

I’ve had two sons in the past 10 days who are ready to leave the family business because dad insists that the business be run in his predominant style.  I understand mom and dad’s concern.  They know their approach has been successful so far in the family business and they are nervous that a different approach won’t be successful.  Many times mom and dad’s retirement is relying on the future success of the business.  There’s good reason to be nervous!

People today thrive on being able to express and work with their unique gifts and personality.  If you’re trying to smother that, stifle it, or flat out kill it off, you will run your children out of business and a potentially viable retirement plan (having your children buy you out of the business).

What you need to do is to identify the style differences so you can begin to speak to each other in each other’s language and build your team around styles and strengths.  Don’t try to make a methodical introvert your new sales leader and conversely don’t try to make a gregarious salesperson your controller!

A successful family business learns how to identify inherent talents and as Jim Collins says in Good to Great put the “right people in the right seats on the bus.”

The problem is too many times moms and dads get anxious and nervous with the next generation’s style.  That’s where governance comes in.  I just finished a project helping a family make a successful family business succession transition by helping the parents set up clear goals and accountability for the next generation leader and the business that must be met in order for the succession to be completed.  Click here to see a video with mom talking about the process.

So I’m not asking you to simply roll over and not worry about the style differences.  I’m suggesting that you embrace the differences, build your team and accountability measures keeping the behavioral styles in mind.

Most importantly, realize that we are all wired differently.  No style is better than another.  Stop making each other wrong for having unique styles and approaches, and start learning how to appreciate each other and set each other up for success!


Ignoring poor performers in the family business can ruin your team

slacker-at-workIgnoring poor performance can do serious harm, not only to your team, but to the player who is under performing.

In the family business setting, it can often feel like you have to tell your family member they are “no good” and risk causing bigger, deeper conflicts in the family community.  But trust me, not dealing with it is going to cause bigger issues down the road.

That’s why I encourage all of my family business participants to build a “coaching culture” with their team so the team gets used to, and expects consistent, constructive performance feedback.

As one of my idols, John Wooden said, “Great coaches know how to give feedback without causing resentment.”  True coaching leaders create a partnership based upon trust, mutual respect and an unwavering commitment to performance excellence.  Their team members expect the coach to challenge them to bring out their best!

I’ve developed a simple three question approach that helps coaching leaders quickly diagnose performance issues and have a path to discussing the issue with the team member.  You can get access to this practice and all of our deliberate practices by clicking here.

Don’t ignore poor performance!  It can seriously undermine your team.  When your team members see company goals and mottos that are all about achieving greatness and see you turning your back on a poor performer, they will seriously question the integrity of the organization and you as the leader!


Use 1 sentence to strengthen/repair family relationships this weekend

The most successful family businesses I work with have strong, healthy relationships as a foundation of their family.

One of the fundamental skills we coach to maintain healthy relationships is the ability to show genuine appreciation for others even in the face of disagreement and turmoil.

Many clients tell me they are reluctant to say something nice about someone they’re angry with because they think they will be acting insincere or phony.

I believe you can be legitimately angry or disappointed and still be able to hold genuine appreciation.  Showing appreciation is like “making a deposit“ in your relationship account with someone.  Building positive energy in a relationship gives you more room to work on tough issues when they arise.

Practice this skill this weekend!  Are you ready?  You can do this!

Do this with as many people as you can in your family.  The stretch goal is to do it with the person you have either the weakest relationship or a strained relationship.

Here we go…

Say “I wanted to let you know what I really appreciate about you is…(fill in the blank)”


  • …how dedicated you are to our family/our parents /your children/my children
  • …how much you care about everybody
  • …how hard you work at being a good _______(their profession)
  • …how you were always there for me

You get the idea?

Some clients tell me, “I would if I could think of one coach!”  And when I push and challenge them. they always come up with  something they appreciate and I’m often surprised how touching it is when they do.

So rack your brain – and come up with one.

Being able to observe and articulate redeeming qualities of someone is a skill in and of itself.  The sooner you build that muscle the sooner  you’ll have healthy strong relationships!

If you want free, full access to all of our deliberate practices, sign up here!


Family Business Pyramid – TRUST

Lack of trust, or mistrust, is a silent killer on most teams and in most family businesses.  The problem is, as trust erodes, people don’t talk about it.  People start withholding information, energy and communication.  Before you know it, relationships go from being flexible and fluid to brittle and broken.

High performing teams must learn how to call out the “elephant in the room” – a lack of trust.  Unfortunately trust can be a complicated subject.  In our Family Business Playbook™ we have a simple drill that allows teams to further explore trust based upon three key elements of trust; reliability, competency and character.

If you think your team is ready for the Measuring Trust drill, go here and get full access to this drill and our Family Business Playbook™.

From screaming to calmly taking 360 feedback

Here is a great article about all things family business.  References to fights of biblical proportion, to finding ways to being a business first family. I thought the best quote came from West Mathison who said “Stemilt has progressed, Mathison said, from days when his father and grandfather “screamed at each other” when meetings grew hot to personality profiles and 360-degree reviews by one’s boss, self, peers and subordinates as tools of improved communication.”

It’s amazing how a little outside feedback can bring some calm and objectivity to the situation. A 360 degree feedback process can be quite simple and help family members see themselves as other (non family members) see them. It’s pretty much impossible to be objective with your family members.

I recently worked with a father to do a 360 process for his 3 sons. It included feedback from not only employees in the business but outside stakeholders like key customers and vendors of the business. The feedback provided great information that helped us create specific leadership development plans for each of the siblings. It was so much more valuable coming from sources other than Dad. Consider the 360 feedback process as a possible gift to give to your kids next year!

Be sure to send this to anyone whom you think could benefit from this.  If you would like to receive our free videos via email, please sign up here.

How to name a successor and still remain a happy family


Today’s letter is from Ron in Maine:

Dear Coach Pete,

I have 3 sons and a daughter all working in the business.  They’re all doing a good job and I know how lucky I am to have them all here.  I am also getting more nervous about facing the reality of having to name one of them as my successor.  My wife and I fear that decision could cause a major divide amongst the broader family.  They all have spouses and I can see their spouses getting their heart set on their spouse being the next president. 

What a great question Ron!  As you noted you are so lucky to have them there.  I also get at the same time that you don’t want this succession discussion to blow up the whole thing up.  Ok, I have your one stop, easy solution: Sit them all down in the room and tell them that you love them all so much that you couldn’t possibly choose one over the other, then bring in your new high powered CEO you just hired from outside that they now work for.  You’re done!  Problem solved!

Ok, I realize that might not be the right answer.  I can really feel your pain having my own children and really faced with idea of picking one over the other would be so difficult even though they have lobbied for that a couple of times.  You know you don’t say specifically Ron, but I’m assuming you have a little bit of time between now and when you need to make the decision.  This process can be done right if you take some time.  We just finished a 5 year process with a family.  We named the next president and everyone’s still happy because they really understood how it was all going to happen and when it was all going to happen.

One of the first guiding principles I ask all of my families to sign off on is, let’s get good at making business decisions, because as one of my colleagues says is, the business is what throws the party.  It’s what provides our financial abundance and security.  So first and foremost we need to get good at making business decisions, not just family decisions.   Next, sit everyone down in the room and take them through the process step by step with a timeframe.  What I found is the biggest concern that both candidates and their spouses have is that it’s not going be a fair process.  But when you have transparency with everybody in the room and you outline the process, that’s going to really set you up for a successful outcome.  I have steps outlined here that you can download and these are proven and they have worked time and time again with families.  When you get in this process, the best candidates will emerge over time but here’s another important thing, really involve some outside advisor because they can bring a different perspective and they can say things to your kids that you cannot say to them.  Be careful, don’t pick your attorney buddy you have known forever; who’s known the family forever.  Get a business coach.  Get someone who has expertise in leadership.  It will really make a big difference in the process.

Ron, keep reinforcing the good idea of your good business decision, be transparent with the process and have update meetings annually or semi-annually and I think you will have good outcomes.  Here’s my challenge to you:  Pick a date for the first meeting and if you send it to me, I will hold you accountable from afar, but if you send me that date I will send you a list of leadership competencies we’ve developed with many great companies over the years that will really help the process get started.

As always, email this on to anyone you know who could benefit from this.  Send us your successes, your challenges, your other questions – we share them here with all the families and that’s how all the families get better and learn from each other.  Remember a great family business has a lot of important positions to fill.  As Jim Collins says in Good to Great, “You need to get the right people in the right seat on the bus.”  Now get back in the game and play to your potential.

Be sure to send this to anyone whom you think could benefit from this.  If you would like to receive our free videos via email, please sign up here.

Create camaraderie in your family business

Don’t under estimate the power of friendship and fellowship in the family business. When I asked a family group what they wanted, Jeff, one of the brothers, said, “Camaraderie.” It turned out to be an important idea. At the time the sibling group was not really enjoying each other’s company. They were stuck in a strained relationship haggling over roles and responsibilities in the family business.

After Jeff’s suggestion the group committed to a series of camping trips and adventures together. It’s amazing how all of the tension can melt away around a nice campfire or ATV ride. After each trip the group began to laugh a bit more, relate to each as brothers and friends, and eventually that energy found its way into our business meetings at work. They began to collaborate and work together to solve their common business problems.

Now creating camaraderie is a ongoing practice. They each take responsibility for designing and hosting a quarterly adventure. Like everything, it takes a strong intention and commitment to keep up the practice.