Family Business Transitions: The Current Generation’s Perspective
By: Richard Magid
A couple of weeks ago I moderated a panel on the topic of Family Business Transitions. The audience were members of the California Self Storage Association. Like most industries, a large percentage of the member companies are family-owned businesses. In fact, there are over 24 million family-owned businesses in the US and over 66 percent of them expect a change of leadership in the next ten years.
About 18 months ago I posted a blog on the topic. Here is a repost of that blog with some updates.
This post is written on behalf of all the Parents we have worked with in transitioning their companies to the next generation…
Dear Son/Daughter,
I know that you would like me out of the business so you can run it your way. You have really put the business back on track. With your skill to sell and your ability to use the new technologies to advance our brand we are making more money than I could ever have dreamed of.
I appreciate your hard work. It makes me proud to think that the business will continue on to the next generation. Not many businesses make it to the second (or third) generation!
So, why is it so hard for me to leave? What scares me sitting here thinking about my future?
1) My identity is wrapped up in this business and has been for the last 40 or so years. I am not sure who I am without the business as my focus. It is a place for me to feel a sense of value and engagement. There is a limit to how much golf I can play. My retired friends have little to talk about.
2) I still need the income to live on given the economic uncertainty in the world. Stepping away from seeing the financials daily frightens me. Even with the significant dollars in the bank, I don’t feel like I can control its value. Will it be enough to live the life I deserve and worked so hard for?
3) While you have done so much good for the company, I am not sure you’ve experienced enough of the difficult times to react quickly to changing conditions. Remember, the last time you pushed back on me when I had a feeling that we needed to do something quickly?
4) The hunt of the deal still energizes me. Yes, I am tired and can’t work the long hours that I use to, but I know that I can still sell and the customers trust me. Please don’t forget about the importance of great customer service.
5) I am afraid that you (and your brother/sister) will let the business come between you if I am not here to mediate. Remember to separate your business conversations from your personal conversations as much as possible. Leave it out of family functions! Respect your individual contributions and leverage your strengths. If necessary bring in outside assistance to keep your dialogues healthy and focused.
I want you to build your own identity and not live in my shadow all the while keeping alive the legacy that I started 40 years ago, it is important to me!
With some luck and a bit of old-school elbow grease, I know that you will make this company even greater than where we stand today and I hope that you’re fortunate enough to have a child of your own to take over in another 20 years.
Sincerely,
Soon-To-Be Former CEO
P.S. I look forward to hearing your thoughts.
