Success or Succession?
On this weeks episode of the show I discuss the fact that often the definition of success for a family business is its ability to pass the legal ownership of the business between generations. This is obviously a fantastic part of a family business, if that is what everyone wants.
But, what happens if that isn’t the case and yet all the advice that is being received is focussed solely on the technical, legal and tax benefits of passing the business to the next generation?
I cover some of the alternatives and use a couple of examples of how focussing on wellbeing and discussing the alternatives lead to positive outcomes for all.
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Listen to the Episode here:
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Separating Ownership and Management
When we speak about succession or transitions in a family business it tends to lump in both the ownership transition and the transition of a leadership or senior role within the business.
Separating out these issues can lead to more meaningful discussions as you can then look at whether you need to be an owner in order to work within the business, or whether you need to work in the business to be an owner.
You are able to be an effective and impactful owner of the business without working in the business, if that is what you would like to do. There are great examples of this that I have worked with.
You are also able to look at alternative ownership structures if that is the best way for your business to become an enabler for others.
Employee Ownership is a great way for a family to sell their business and yet retain the values and local presence and positive contribution to the local society.
You can retain some ownership within the family to help create resources for everyone to follow their own path, yet also pass the majority of the ownership to the employees of the business. This could of course mean family members, but if there is no one in the ‘next’ generation that would want to take the business forward or work within it, an EOT is a great solution.
You can listen to my interview with Chris Budd, who sold his business to an Employee Ownership Trust here.
Follow your own Dreams
If working or owning the family business isn’t your dream and you feel that you would rather pursue your own passion, there are again good examples of that you can refer to.
Debbie Ekins is one such example, she decided that although she loved her family business that a career within it would leave her unfulfilled. So she spoke with her parents and explained this and they were able to make the necessary plans to allow for this to happen.
Debbie now has her own business (www.debbieekins.com) and has recently started another business with her sister (another family business!) called Cool Story Co.
I also interviewed Debbie about the way she approached the situation and you can listen to her story here.
The Importance of Well-Being
Life is not a rehearsal and I have seen first hand the damage that can be done to people who have felt pressured (often not intentionally) to take on the family business either in an employed role within the business or as a future owner of the business.
When that person feels trapped and doesn’t feel that they can speak up, it can lead to negative outcomes for that person.
Defining success for a family business purely at the business level is one dimensional and forgets the fact that there are real human beings at the centre of every discussion around the business. Beyond the business owning family there are also other employees, suppliers, customers and the local community. If the business is being owned by people who do not want to own it or being run by people who do not want to run it, all those other people are likely to suffer too as it will become apparent in the business itself.
Focussing on our wellbeing is such an important aspect of living a life without regret (Top Five Regrets of the Dying).
Focussing on our won wellbeing can seem counter-intuitive or selfish, but it is actually the opposite.
Action Points
When looking at how fulfilled you are by your role within the family business there some areas of your life that you might want to use as the lens for that.
There are many wellbeing experts in the world and I am not claiming to be one of them, however I have found that using the following elements of wellbeing as a barometer for how fulfilled you are. To summarise they are:
- Emotional
- Spiritual
- Physical
- Intellectual
- Environmental
- Financial
- Social
- Occupational
I have created a very simple tool that allows you to assess where you are in your aspirations toward fulfilment in these areas. If that would be useful for you, please get in touch and I will happily share it with you.
