We don’t pay enough attention to the effect of different ages and stages on people’s thinking and behaviours. This raises real issues when family members working together in a family business are at different ages and stages in their respective lives.
We see this most powerfully when two or more generations of a family are working in a family business. Let’s just consider a two generation business:
- Financial and Lifestyle Stages: Mum and Dad are well into their golden years, or perhaps they’ve already come out the other side? They are most interested in preserving the fruits of a lifetime of work, because they’re: (a) ready to slow down to enjoy a little more leisure time; (b) acutely aware they need financial security to fund a graceful lifestyle and, (c) chillingly realise that they’re now beyond recovering, if disaster strikes.
They need to get their money, and their personal guarantees and securities, out of the business. Meanwhile:
Martin and Jenny, their son and daughter, respectively have young and teenage families, large mortgages, car loans, school fees and a host of other structural and consumption expenses that, taken together, are bleeding them dry and creating great stress in their respective households.
They’re torn between the need to maximise their own income to cover their outgoings and reinvestment in the business to ensure it stays competitive and is a strong source of continuing income for the rest of their working lives.
Clearly, Mum, Dad and “the kids” are singing from very different hymn sheets.
- Personal and Emotional Stages: Mum and Dad worked hard to raise and provide for their family. Initially, (please forgive my crassness) they were Breeders, then they became Protectors and Providers.
None of that applies anymore, so unless they are, or have become really good companions, a lot of their rationale for being together has pretty much gone. They need to renegotiate their go-forward relationship (which usually means recognising that the ladies have grown up while the men haven’t), or they will suffer a lot of friction as they realise that: (a) they no longer share a sufficiently strong sense of purpose to be able to work well together as a team, and (b) that their individual needs, goals and expectations are no longer closely aligned. Mum wants to spend more time with the grandkids; Dad not so much. He wants to play golf and go fishing, as well.
Meanwhile, the next generation parents are deep in the throes of providing and protecting, but they don’t yet have control of the golden goose that generates the income … and they’re concerned that Mum and Dad are no longer investing as much as they should in the company – to secure its, and their own, futures.
With the nicest people, the best families, and the most responsible intentions in the world, this is a powder keg scenario that’s just waiting for a match.
- Consider, and develop an understanding and appreciation of, the probable effects of progressive ages and stages on individuals, the family and the business, over the coming years. Like ageing itself, this is not about if, it’s about when, and there really is no attractive alternative!
Having said that, the better course is to welcome the inevitable and plan to make the most of it, rather than railing against the gods about cruel fate.
- Acknowledge reality. Respond practically and empathically to each family member’s circumstances, capabilities, expectations, needs and interests. Everybody is at a different stage in the same life journey, and helping everyone along the way produces better outcomes for individuals, and for the family as a whole, than selfish self-absorption.
- Engage all relevant personnel in planning ahead, for the family and the business. Take into account the likely effect of changing ages and stages, including major milestones and hard bumps, as time passes.
Although there’s inevitable speculation in this process, major changes and their associated needs can be predicted with high confidence.
We can’t know what state individuals, family and business will be in when key events, or phases happen, but we do know that working to a credible plan almost always produces far better results than having no plan.
- Plan for Succession. Succession is an identifiable event that happens (hopefully), after a considered process of transitioning ownership and leadership from the old guard to a new team.
Once a date is set for succession, you can readily reverse engineer everything that needs to happen, in the family and in the business, to maximise received benefits from refreshing and renewing your entire family business environment.
Of course, talking and planning are a lot easier than doing, but when everybody that counts is on board with the plan, their increased focus and levels of motivation will dramatically improve the likelihood that it will happen.