Family Business Succession
Some of them left for 18 months, while
a couple friends spent over 5 years in
other industries. Most family business
consultants believe that some separa-
tion from the company is a very healthy
way to prepare for a transition.
During my time away, I found out
how to make it on my own. I had to
hustle and perform without the safety
net of the family checkbook. Learned
to work for someone not related to
me and ultimately learned how to be
a good employee. It also gave me the
confidence that I could survive, and
even thrive, on my own. Not a bad skill
set for a future leader. Several of my
peers who spent time in other indus-
tries brought back very specific skill sets
to help the company evolve. This time
away, provided that it is well spent, can
help more senior employees view the
next generation in a different light. No
longer are you the silver spoon heir to
the throne, you actually have something
to bring to the table.
Upon returning to the fold, the
education must continue. Too often, I
see owners struggle to provide the nec-
essary tools for success. They let their
child move along the same job progres-
sion as others in the company, but fail
to take them aside for some additional
ownership training. One of the most
common gaps is in the financial arena.
I was recently on the phone with one of
the next generationers I coach and he
shared with me that he and his father
have been going over the monthly prof-
it and loss statement for the company.
This is fantastic. By understanding the
basic financials, he will recognize pat-
terns and ratios for various income and
expense lines. These ratios will serve
him well.
Financial education, particularly
cash flow, is not always the easiest to
teach. Some people were exposed
to this in school, but it can often be
difficult to translate the theoretical in
to the nuances of the family business.
I would recommend that the second
generation spend some time with a well
meaning CFO or controller. Further-
more, it would be advantageous to learn
how banking relationships and lines
of credit work. If the next generation
leader eventually takes the reins, they
are going to be borrowing some money.
Finally, I would suggest that you seek
out a “finance for non-financial manag-
ers” course. A quick Google search will
yield several different options to choose
from.
While financial education can be
fairly concrete, learning the nuances of
managing people is certainly a bit more
fluid. I have recently spent a lot of time
and research on the subjects of leader-
ship and management. An old mentor
of mine, Dr. Rick Johnson, was heav-
ily involved with the congruence and
divide of these two activities. One of
the more profound things he taught me
was that leaders do not necessarily have
to be great managers, but managers
have to be solid leaders. Leadership has
many definitions and opinions, but one
commonality seems to be the building
of relationships. While I don’t want to
go too far into the differences between
the two arenas, the common thread is
relationship building.
I reflect on the success of my family
business, I have come to realize that
my father was an investor in people.
Although competent in the individual
components of the business, such as
sales and operations, his true gift was
in building a solid team of managers
in each of these aspects. Teaching next
generation leaders how to encourage,
inspire and relate to people is one of
the best things an owner can do.
When developing the future leader,
I would always encourage the owner
to focus on communication skills and
more specifically generational differ-
ences. When I teach managers about
communication, we tend to spend a lot
of time in this area. Frankly, genera-
tional differences can make it very dif-
ficult to communicate expectations and
create relationships in the company. By
the way, no particular generation gets
a pass here. Each one of them is guilty
of dismissing the core values of others
outside of their own generation. The
study of how to overcome generational
challenges in the workplace was one of
the most profound pieces of education I
was exposed to. This did not come nat-
urally. I had to seek out this information
and apply the principals. As a second
generation manager flailing in my role,
I was literally saved by a researcher
names Claire Raines. Her work can be
found online at generationsatwork.com.
There are several other educational
areas a next generation owner should
become involved with. One of the most
valuable concepts you can help them
understand is humility. While humility
is often confused with being less than
or some other negative characteristic,
this could not be further from the truth.
My favorite definition of humility is the
ability to remain teachable. These gaps
in education are not going to be filled
in days, months or years. The gaps are
filled by encouraging that future leader
to remain on their educational journey.
If I can be of service in this endeavor,
know that I am always here to help. n
JASON BADER is the managing partner
of The Distribution Team, a firm that
specializes in helping distributors become
more profitable through strategic plan-
ning and operating efficiencies. The first
20 years of his career were spent working
as a distribution executive. Today, he is
a regular speaker at industry events and
spends much of
his time coach-
ing individual
distribution
companies. For
more informa-
tion, call (503)
282-2333 or
contact him
by e-mail at
Jason@Distribu-
tionteam.com.
Also visit The Distribution Team’s website
at www.thedistributionteam.com.
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