Family-Owned Businesses and the Challenges Associated with Raising Children as Future Leaders
“Leadership + Training + Tools = Success”
“The kids are spoiled and never earned their place in the business!” “He only got that role because he is the son of the owner.” We have all heard the tales of children born into a family business who become entitled without merit. This situation can set children up for a life of frustration and alienation.
Unlike large corporations, family-owned businesses are unique because the ownership and leadership is frequently passed along to the next generation with little training for the role. Preparing your children for this transition includes teaching them how to communicate effectively; expressing their thoughts, concerns, and expectations for the future -- especially if they enter the family business in a leadership position managing both family and non-family member employees.
A good start for parents in this situation is to introduce their children to the rules and protocol for participating in both company and family meetings. How do you expect your children to behave and communicate? Developing a sibling or family “Code of Conduct” that assists your children in transitioning into the business can provide the guidelines and structure essential for this process. A family advisor is an asset in developing your Code of Conduct.
The following are some critical areas and example questions for a Code of Conduct that help your children develop a professional demeanor and cultivate a positive and productive sibling relationship:
- Agreed upon Messaging and Communications with Others
- How do we present a singular voice outside the room?
- Work Performance/Ethics
- How do we work together?
- Financials/Financial Management Protocols
- How is compensation managed?
- Conflict Issues
- How do we resolve conflict?
- Family Governance Plans
- How do we manage others in the family with regard to business issues?
Children in a position of inheriting their family business are in a special situation. They have a clearly defined occupational future and can be groomed and prepared for this transition at an early age. Regardless of whether they choose this path, this preparation can help to groom them for future success, within or outside of the company.