5 Techniques for Passing the Family Business Torch
Originally published: 08.01.13 by Lisë Stewart
Important steps for transitioning leadership from one generation to the next
Many people ask me how the new generation of leadership can honor the family legacy and tradition while still putting their own ‘stamp’ on the company culture. This can be particularly difficult in this day and age, when we have so many generations working in the same place. However, history and tradition form a strong foundation for the company culture, provide stability and help build loyalty. Below are some techniques I often share with my clients as they prepare to pass the torch from one generation to the next – with a desire to preserve and honor the best of the past while evolving the company culture to support the generations of the future.
1. If you are in the new generation of leadership in your organization, interview members of your founding generation.
If your founders or your previous leaders are still alive and able, ask them about the values that were most important to them as they grew their business. What was the reputation they wanted the company to have with their employees and with their customers? What did they believe was their competitive advantage? What kind of people did they want to be surrounded by and why was that important? How would they describe their own leadership style? What were some of the most important lessons they learned? And finally, as they passed the reins of leadership to the next generation, what did they want them to know?
If your founding leaders are no longer alive or able, you could interview the oldest employees, or think back to some of your earliest memories of your parents, grandparents and others who worked in the company. What impact did they have, and why was it important? What were the traditions they valued most highly? Why were people loyal? And what makes you most proud of your founders?
2. Answer those same questions for yourself with regard to your own leadership style.
In particular, how would you like to be similar to or different from the leaders of the past? Compare and contrast the values you hold most dear and the attributes of the people you like to be surrounded with and consider as leaders. Identify the aspects of your traditional culture you would like to preserve in the company and how your own style might compliment this.
As an example, I recently worked with a group of siblings who were reminiscing about the attributes of their father and grandfather. They talked about how their father and grandfather treated everyone who came through the front door of the business – employees and customers alike – as if they were family. They always said that a customer, or employee’s personal story was just as important as their purchase order. The siblings wanted to preserve some of the aspects of that family culture, but recognized it was a challenge in these days of social media, where access to personal stories can sometimes cause more problems than closeness. To preserve the culture, they realized they needed to develop some policies around the use of social media for family members and employees, while still recognizing that, in the larger, growing company, people and their personal stories still mattered. They identified ways in which they could continue to build more personal relationships, even though their company was now much larger and more complex than the company their founders had managed.
3. One of the most important aspects of preserving company culture is to take the time to write it down.
Think about ways to distinctly describe the traditional culture that was developed by your predecessors. Once you’ve decided which aspects of that culture you wish to preserve, and what you would like to change, rewrite a description of your company culture and values in language everyone can understand. Keep it simple and clear, and use language that describes behaviors, not just concepts. “We listen and respect the opinions of everyone, regardless of age or experience.”
Here’s an exercise that can be very useful in helping multiple generations appreciate the differences everyone brings to the organization:
Several years ago, I was working with a large family business that consisted of grandparents, parents, grandchildren and a fourth generation that was just beginning to come into the company. The family was experiencing quite a bit of conflict with a wide variety of leadership styles and inter-generational differences. During our first family governance meeting, I divided the room in half, with parents and grandparents on one side of the room, and grandchildren and great-grandchildren on the other side of the room. I gave each “team” a large piece of flip paper and some pens and asked them to write down what values and characteristics the other team brought to the company that they appreciated most. I asked the older generation to report first, and it was magical to watch the faces of the younger generation as they heard their parents and grandparents describe the value of their energy, fresh ideas, connectivity and sense of wonder. However, the most touching moment came as the children rolled out an exhaustive list of the attributes they valued most highly in their parents and grandparents. After several years of perceived tension and criticism, there was not a dry eye in the room as they shared their most heartfelt observations. It was a wonderful way to develop a foundation for their family governance.
4. Utilize the cultural description of the company in policies, procedures, plans and professional development materials.
There is little value in having a well-defined company culture with a set of company values if they’re not shared and utilized across the organization. Some questions to ask are:
- How does your strategic plan reflect and support your company culture?
- What behaviors do you recognize, reinforce and reward in your organization? Are they in support of your company culture, or do they work to undermine that culture?
- Are you able to translate the language in your company culture and values into specific behaviors you would like to see demonstrated by employees?
- What are five things you, as a leader, do daily to support and nurture your company culture and the values you hold dear?
5. Create a video of your founders or other senior leaders as they describe how the company was originally formed, how it grew, and what the key milestones were.
Culture and tradition serve as strong organizational foundations, but all too often, tradition, history and values die with the passing of the founding leaders. Creating a video is a wonderful way to capture some of the time-honored stories from the history, as well as the legacy, of the business and also preserves the sense of stability, honor and tradition.
Articles by Lisë Stewart
Hiring Smart! Effective Recruitment and Selection
Your Business Prospectus
Building Value from an Investor’s Perspective
Changing the Way We Change
The world is a busy and crazy place these days… We are inundated with messages to be leaders, to innovate, and to bring new products, services and marketable ideas to the marketplace. We are told to inspire, spin, market, promote, nurture and encourage change. We need to have energy, integrity, enthusiasm, a strong backbone, a clear vision for the future and the ability to learn from the past! And the list goes on…
The Perils of Traditional Retirement
Study after study indicates that traditional retirement (ceasing to work suddenly, devoting time to ‘leisure activities’) can have a highly negative impact on the physical and mental well-being of men, especially those who are entrepreneurial, self-employed and/or senior leaders in their organizations.