Passing Your Business to the Next Generation

Passing Your Business to the Next Generation

Should you pass your business down to the next generation? When you have family working in your business, it is a wonderful thought that your family can carry on what you have put so much energy, sweat, tears and love into. But statistics show that only one-third of all family businesses are successfully transferred to the next generation and only 13% are successfully transferred to the third generation. Why is this? Many family business consultants say the primary reason for the low survival rate is the failure to develop and effectively plan for the transfer of ownership and management of the family business. Here are some of the reasons that so many of these well-intentioned transfers fail. The next generation may not have the same drive and commitment the founder had when he or she built if from scratch. If the business has been successful, they may have had a very different life style than the founder did when the business was started.  You’ve seen examples of this in businesses, haven’t you? They may not even want to run the business. They may feel it is expected of them but not what they really want to do. Can you see how unspoken expectations can cause resentment within the family? They may not be capable of running the business. Have they been trained in the skills necessary to run the business? Do they have the leadership and management skills to deal successfully with an ever-changing business climate? Another big challenge is trying to balance fairness in employing many children or even grandchildren in a family business with various skill levels,...
Creating Healthy Work Boundaries

Creating Healthy Work Boundaries

Unhealthy work boundaries create hurt feelings, unrealistic expectations, lack of accountability, to name a few. In family businesses, unhealthy work boundaries may go unnoticed as cause for business issues. When these problems are solved, businesses transform. Fixing the unhealthy boundaries may be difficult, but repairing them is worth it. Friend and family relationships are complex, with the past experiences and shared history. When people bring relationships to work, the complexity multiplies. It’s difficult enough to confront an employee who is not doing the job. Just imagine when the employee is a friend, relative, or spouse!  Accountability goes right out the door, doesn’t it. You want to be liked by friends or family, but in business, feelings affect constructive feedback. What’s the best way to run a business with friends or family? Consider these ideas: Business is an Agreement Customers agree to exchange money for goods or services. Businesses agree to provide goods or services. Employees agree to provide service for payment. A successful business transaction happens when both keep agreements. Competence First, Connection Second In personal relationships connection is the guiding principle. When business and personal dynamics mix, dealing with issues is challenging. Competence is first in keeping agreements to create healthy work boundaries. No Friends or Family on the Organization Chart Your business is made of people in positions. Positions have functions that produce results. Results keep the business’ agreement. It’s irrelevant if the person in the position is friend or family. Every box on a chart is an agreement to do a job. That agreement is higher than personal ties as a commitment to competence first. Swinging...
Why Is Delegation So Difficult?

Why Is Delegation So Difficult?

Eli Broad is quoted as saying “The inability to delegate is one of the biggest problems I see with managers at all levels.” I see that as well.  There are two major reasons why managers avoid delegation: they don’t want to lose control and they believe no one can do the task as well as they can.  Do you relate to either of these? I recently had a phone conversation with a client who had both of these issues. He runs a printing and mailing operation that is in a lot of chaos. We were discussing how he delegates to his employees and he shared this recent example. “The two people in the production area decided to organize the inventory. We needed this to be done, he said, but they weren’t doing it the way I thought they should. I was on them every day to do it better; to do it my way, not their way. They were slow; they didn’t have a process to follow, and in fact, it seemed like they didn’t know what they were doing.” I asked him how they reacted to his input and he said it built resistance in them. I shared with him the steps to delegate properly, have an agreed upon deadline, have an agreed upon reporting system on progress, and have agreed upon results. When I asked if he had used this process – well, you know the answer, right? No, he didn’t, which left his employees feeling micromanaged and belittled. I suggested he put aside his belief that no one could do it as well as he could...
Guidelines For Effective Delegation

Guidelines For Effective Delegation

Contrary to popular belief, delegation is not “dumping” work on other people.  Make it a part of your management system for getting work done through other people by creating an environment in which they want to do the work and are able to do the work. There are four steps in the delegating process: 1. Identify the work or result you want to delegate and determine to whom you’ll delegate it. You can delegate almost anything, with the following exceptions: You can’t delegate the overall result of your position (unless you’re leaving your position). You can’t delegate the work or results of someone else’s position (unless you have their agreement). You can’t delegate work or results that have been delegated to you and that you’ve agreed to do yourself. When it’s time to delegate, determine which position is appropriate for the task. Not the appropriate person, the appropriate position. Many business owners and managers have a tendency to delegate everything to the same persons, over and over. They are the ones who have come through for you before. What’s the remedy? Pay attention to your own habits. Notice if you’re stuck in a comfort zone of habitually delegating to the same people. Invest managerial time in creating systems and training people how to run them. Force yourself to trust people to do their jobs. 2.  Put the delegation in writing, with the due date. Once you know what you’re going to delegate and have identified the right position and person, you need to write the delegation down with as much specificity as possible. When you put something in writing:...
Why Create Working Relationships: Principles 1 & 2 Managing by Agreement and Managing by Exception

Why Create Working Relationships: Principles 1 & 2 Managing by Agreement and Managing by Exception

You can’t manage anything your people don’t agree to do. This is why employees’ agreement to do the work, coupled with their commitment to follow through and their willingness to be accountable, are at the heart of working relationships that really work. Two important principles are Management by Agreement and Management by Exception. The principles of management by agreement and by exception are the foundation for effective working relationships. These principles mean: The manager and employee have agreements about what work is to be done and how and when the work is to be done. Often these agreements are expressed in documented business systems. Any changes in the work requirements are made only after mutual agreement between the manager and the employee. The employee takes on full accountability for performing work and achieving results as agreed, and the manager is accountable for providing the employee with the resources and guidance needed. Exceptions to the agreement are reported immediately. The employee is accountable for notifying the manager and any other affected people in writing if the work will not be performed or the system carried out as agreed. The manager also notifies the employee if commitments made by the manager cannot be achieved. The manager can assume the work is being performed as agreed unless otherwise notified. Periodic check-ins between the employee and manager, called “reporting loops,” are the main vehicle for keeping each other informed about how work is progressing. Failure to notify of changes, exceptions, or missed due dates is not acceptable. Relationships built on trust are developed as managers and employees keep their commitments and successful results...