With most family-owned businesses, as the next generation begins to step up into roles within the business, a common picture emerges – you have dad, standing in front, looking around, wondering where everyone else is…and you have the kids, looking at the back of dad’s head, wondering where he’s going. Like many areas of life, family members learn to adapt. After all, they have been doing it on a personal level their whole lives. They become increasingly competent at running the business through sheer experience. This often frees dad to expand and become more entrepreneurial. Over time, the kids want to get involved in leading the business.

The pull from two generations

I’ve seen this time and again. A family business ticks along, typically with dad holding a strong vision for building a future for his family. While dad is busy building that future, the kids start to run day-to-day operations. Years can go by before dad and the kids come back together and realise they have been running the business in two directions – dad’s pulling toward a particular strategic future (that he likely hasn’t conveyed well) and the kids’ pulling toward the business they’ve decided they think it should be.

This is where conflict, and dad’s lament, begin to creep in. However, unlike many other business structures, we aren’t talking about the first moment of conflict – we’re talking about the 43rd! It’s the moment when the family business begins to become a place of judgement. Dad sees an emerging desire for change and doesn’t feel his kids appreciate what it took to get the business to where it is. The kids have spent years following the back of dad’s head and are seeing other, maybe better, ways of managing the business, and are probably getting angry at dad. In turn, he doesn’t understand why. It can, and should, be a clarion moment for a family business.

Breaking the conflict

When a family business reaches a conflict point between two generations, there are two possible outcomes – you continue to live in conflict, or start actually planning for the future. Emotions, fiercely-held opinions and, yes, deep history, make that task nearly impossible for a family to manage on their own. What’s needed is an independent party to help the family write the map for their future and reset the direction. It’s critical they choose the right strategic advisor – one who is capable (fairly obvious), but also who has a process and proven record of standing beside families over decades as they navigate succession, growth and change.

At this point, there are three core stages in the process:

  1. Direction and strategy – this critical work starts by separating the business’ vision, mission, purpose and values, and then its strategy, from any one player in the family. Far from being a dispassionate process, this is about taking a genuine look at what is ‘best for family business’. This answers dad’s lament – where are we going now – and becomes a roadmap that is agreed to, and owned by, the family…not just dad.
  2. Family roles – with the roadmap in place, you can then work to align the family to the journey ahead. Each can have a role to play, processes to develop and, importantly, new things to learn (including dad, who needs to re-learn how to lead while developing capable family members to take over).
  3. Succession or sell – the next question for the kids is, do you want to stay and be part of this? Do you want the responsibility, pressure and challenge of leading? Are you willing to be a custodian of the family business and make the changes necessary to become the person who stands on the shoulders of the giant who came before? If the legacy of the family business no longer matters, or the family isn’t aligned to the future, it’s time to get ready to sell. An effective process will flush that decision out.

I’m passionate about family businesses and see conflict turn what should have been a great enterprise into a sour place, not only for family members but employees too. I’ve also been privileged to walk beside many families and support the turnaround necessary to ensure a bright future. My encouragement – before the conflict point gets personal, take a step back and ask if you have the right process and the right advice in place to secure the future for your family.

Rod Douglas

My passion is working alongside owners and executive leaders of high-growth businesses to help them make positive change possible. I empower leaders to manage the challenges of succession, progression or crisis – particularly where my expertise in culture, strategy and value will make a real difference.