Managing Family Businesses

 

Hi, everybody. I’m Mike Staver. This is Mondays with Mike, a weekly video series where I answer questions from people just like you. Here’s this week’s question.

“My 36 year old works in our company. They have significant responsibilities, but are not ready to lead the entire organization. They on the other hand, think they are ready today. They are on me all the time to do things their way and take over the business. There is zero chance that is going to happen in the next two years. How do I get this dealt with and not create a divide of the family?”

Well, this is one of those “how do I run a business and do family therapy at the same time?” This is a good question. And I will tell you, I have numerous clients right now dealing with this question. So there is zero chance that this person is going to be running your company. Now, the question was they have significant responsibility but are not ready to lead the entire organization.

I don’t know your 36 year old, but I know this. The only way to deal with situations like this is clarity. If it’s always ambiguous, all over the place and we’re like, well, you know, we’re working at it, there isn’t clarity about what your plans are.

So it’s a family owned business, obviously. So the first thing is you have to be clear. You have to sit down with your 36 year old and say, the runway looks like this. You are not going to take over for at least 24 months, maybe 36, and maybe longer. But for at least 24 months, unless there’s some kind of major catastrophe or something happens to me or your co-parent, you’re not going to be in this seat and so what you’re in the business of doing right now, you’re in the process of earning your strips and your bruises so that when you get in the seat, you’ll be prepared. And I know you’re wildly enthusiastic and believe that you are ready. I’m not going to debate whether you are. You aren’t. I’m just not in a position to put you in the chief seat at this point. I know that’s probably disappointing. Here’s what I need you to focus on to prepare yourself to eventually be in this seat.

As you know, there are no guarantees in our family about money or prestige or power. And so the more clear you can be, the better. What tends to happen is we tend to avoid conflict and we tend to avoid clarity in families. Sometimes for fear. It’s going to create the divide that you fear. But the fact of the matter is a lack of clarity and ambiguous dare I say dishonesty can sometimes create the very thing you’re trying to avoid.

So spend some time and energy really thinking about what your intentions really are. And don’t say things like “we’re taking it a day at a time…”, “we’ll see how it goes…”, “we’ll revisit this in a couple of months…” because unless you are going to revisit it, unless you honestly believe they might get the reins in a couple of months, don’t say it. It’s sort of like saying to your kid that you might or might not get ice cream on Friday when you know you’re not going to be in town and you’re not going to take them to get ice cream. So unfair. It’s unkind.

Hope that’s helpful, take care.

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